! The Capitol Complex is closed to the public due to COVID-19. All meetings will be held virtually online. View procedures and guidelines for remote public comment

Download Zipped Enrolled WordPerfect HB0050.ZIP
[Introduced][Status][Bill Documents][Fiscal Note] [Bills Directory]

H.B. 50 Enrolled

             1     

SALES AND USE TAX MODIFICATIONS

             2     
2010 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Wayne A. Harper

             5     
Senate Sponsor: Curtis S. Bramble

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the Sales and Use Tax Act to address definitions, the tax rate at which
             10      sales and use taxes are collected, and the location of a transaction involving a prepaid
             11      calling service or prepaid wireless calling service.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies the definition of bundled transaction;
             15          .    addresses the collection of a sales and use tax at the lowest agreement combined tax
             16      rate;
             17          .    addresses the determination of the location of a transaction involving a prepaid
             18      calling service or prepaid wireless calling service; and
             19          .    makes technical and conforming changes.
             20      Monies Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          This bill takes effect on July 1, 2010.
             24      Utah Code Sections Affected:
             25      AMENDS:
             26          59-12-102, as last amended by Laws of Utah 2009, Chapters 203 and 314
             27          59-12-211, as enacted by Laws of Utah 2008, Chapter 384
             28     
             29      Be it enacted by the Legislature of the state of Utah:


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


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


             86          (r) Section 59-12-1703 ;
             87          (s) Section 59-12-1802 ;
             88          (t) Section 59-12-1903 ;
             89          (u) Section 59-12-2003 ; or
             90          (v) Section 59-12-2103 .
             91          (7) "Aircraft" is as defined in Section 72-10-102 .
             92          (8) "Alcoholic beverage" means a beverage that:
             93          (a) is suitable for human consumption; and
             94          (b) contains .5% or more alcohol by volume.
             95          (9) (a) "Ancillary service" means a service associated with, or incidental to, the
             96      provision of telecommunications service.
             97          (b) "Ancillary service" includes:
             98          (i) a conference bridging service;
             99          (ii) a detailed communications billing service;
             100          (iii) directory assistance;
             101          (iv) a vertical service; or
             102          (v) a voice mail service.
             103          (10) "Area agency on aging" is as defined in Section 62A-3-101 .
             104          (11) "Assisted amusement device" means an amusement device, skill device, or ride
             105      device that is started and stopped by an individual:
             106          (a) who is not the purchaser or renter of the right to use or operate the amusement
             107      device, skill device, or ride device; and
             108          (b) at the direction of the seller of the right to use the amusement device, skill device,
             109      or ride device.
             110          (12) "Assisted cleaning or washing of tangible personal property" means cleaning or
             111      washing of tangible personal property if the cleaning or washing labor is primarily performed
             112      by an individual:
             113          (a) who is not the purchaser of the cleaning or washing of the tangible personal


             114      property; and
             115          (b) at the direction of the seller of the cleaning or washing of the tangible personal
             116      property.
             117          (13) "Authorized carrier" means:
             118          (a) in the case of vehicles operated over public highways, the holder of credentials
             119      indicating that the vehicle is or will be operated pursuant to both the International Registration
             120      Plan and the International Fuel Tax Agreement;
             121          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
             122      certificate or air carrier's operating certificate; or
             123          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             124      stock, the holder of a certificate issued by the United States Surface Transportation Board.
             125          (14) (a) Except as provided in Subsection (14)(b), "biomass energy" means any of the
             126      following that is used as the primary source of energy to produce fuel or electricity:
             127          (i) material from a plant or tree; or
             128          (ii) other organic matter that is available on a renewable basis, including:
             129          (A) slash and brush from forests and woodlands;
             130          (B) animal waste;
             131          (C) methane produced:
             132          (I) at landfills; or
             133          (II) as a byproduct of the treatment of wastewater residuals;
             134          (D) aquatic plants; and
             135          (E) agricultural products.
             136          (b) "Biomass energy" does not include:
             137          (i) black liquor;
             138          (ii) treated woods; or
             139          (iii) biomass from municipal solid waste other than methane produced:
             140          (A) at landfills; or
             141          (B) as a byproduct of the treatment of wastewater residuals.


             142          (15) (a) "Bundled transaction" means the sale of two or more items of tangible
             143      personal property, products, or services if the tangible personal property, products, or services
             144      are:
             145          (i) distinct and identifiable; and
             146          (ii) sold for one nonitemized price.
             147          (b) "Bundled transaction" does not include:
             148          (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
             149      the basis of the selection by the purchaser of the items of tangible personal property included
             150      in the transaction;
             151          (ii) the sale of real property;
             152          (iii) the sale of services to real property;
             153          (iv) the retail sale of tangible personal property and a service if:
             154          (A) the tangible personal property:
             155          (I) is essential to the use of the service; and
             156          (II) is provided exclusively in connection with the service; and
             157          (B) the service is the true object of the transaction;
             158          (v) the retail sale of two services if:
             159          (A) one service is provided that is essential to the use or receipt of a second service;
             160          (B) the first service is provided exclusively in connection with the second service; and
             161          (C) the second service is the true object of the transaction;
             162          (vi) a transaction that includes tangible personal property or a product subject to
             163      taxation under this chapter and tangible personal property or a product that is not subject to
             164      taxation under this chapter if the:
             165          (A) seller's purchase price of the tangible personal property or product subject to
             166      taxation under this chapter is de minimis; or
             167          (B) seller's sales price of the tangible personal property or product subject to taxation
             168      under this chapter is de minimis; and
             169          (vii) the retail sale of tangible personal property that is not subject to taxation under


             170      this chapter and tangible personal property that is subject to taxation under this chapter if:
             171          (A) that retail sale includes:
             172          (I) food and food ingredients;
             173          (II) a drug;
             174          (III) durable medical equipment;
             175          (IV) mobility enhancing equipment;
             176          (V) an over-the-counter drug;
             177          (VI) a prosthetic device; or
             178          (VII) a medical supply; and
             179          (B) subject to Subsection (15)(f):
             180          (I) the seller's purchase price of the tangible personal property subject to taxation
             181      under this chapter is 50% or less of the seller's total purchase price of that retail sale; or
             182          (II) the seller's sales price of the tangible personal property subject to taxation under
             183      this chapter is 50% or less of the seller's total sales price of that retail sale.
             184          (c) (i) For purposes of Subsection (15)(a)(i), tangible personal property, a product, or a
             185      service that is distinct and identifiable does not include:
             186          (A) packaging that:
             187          (I) accompanies the sale of the tangible personal property, product, or service; and
             188          (II) is incidental or immaterial to the sale of the tangible personal property, product, or
             189      service;
             190          (B) tangible personal property, a product, or a service provided free of charge with the
             191      purchase of another item of tangible personal property, a product, or a service; or
             192          (C) an item of tangible personal property, a product, or a service included in the
             193      definition of "purchase price."
             194          (ii) For purposes of Subsection (15)(c)(i)(B), an item of tangible personal property, a
             195      product, or a service is provided free of charge with the purchase of another item of tangible
             196      personal property, a product, or a service if the sales price of the purchased item of tangible
             197      personal property, product, or service does not vary depending on the inclusion of the tangible


             198      personal property, product, or service provided free of charge.
             199          (d) (i) For purposes of Subsection (15)(a)(ii), property sold for one nonitemized price
             200      does not include a price that is separately identified by tangible personal property, product, or
             201      service on the following, regardless of whether the following is in paper format or electronic
             202      format:
             203          (A) a binding sales document; or
             204          (B) another supporting sales-related document that is available to a purchaser.
             205          (ii) For purposes of Subsection (15)(d)(i), a binding sales document or another
             206      supporting sales-related document that is available to a purchaser includes:
             207          (A) a bill of sale;
             208          (B) a contract;
             209          (C) an invoice;
             210          (D) a lease agreement;
             211          (E) a periodic notice of rates and services;
             212          (F) a price list;
             213          (G) a rate card;
             214          (H) a receipt; or
             215          (I) a service agreement.
             216          (e) (i) For purposes of Subsection (15)(b)(vi), the sales price of tangible personal
             217      property or a product subject to taxation under this chapter is de minimis if:
             218          (A) the seller's purchase price of the tangible personal property or product is 10% or
             219      less of the seller's total purchase price of the bundled transaction; or
             220          (B) the seller's sales price of the tangible personal property or product is 10% or less of
             221      the seller's total sales price of the bundled transaction.
             222          (ii) For purposes of Subsection (15)(b)(vi), a seller:
             223          (A) shall use the seller's purchase price or the seller's sales price to determine if the
             224      purchase price or sales price of the tangible personal property or product subject to taxation
             225      under this chapter is de minimis; and


             226          (B) may not use a combination of the seller's purchase price and the seller's sales price
             227      to determine if the purchase price or sales price of the tangible personal property or product
             228      subject to taxation under this chapter is de minimis.
             229          (iii) For purposes of Subsection (15)(b)(vi), a seller shall use the full term of a service
             230      contract to determine if the sales price of tangible personal property or a product is de
             231      minimis.
             232          (f) For purposes of Subsection (15)(b)(vii)(B), a seller may not use a combination of
             233      the seller's purchase price and the seller's sales price to determine if tangible personal property
             234      subject to taxation under this chapter is 50% or less of the seller's total purchase price or sales
             235      price of that retail sale.
             236          (16) "Certified automated system" means software certified by the governing board of
             237      the agreement that:
             238          (a) calculates the agreement sales and use tax imposed within a local taxing
             239      jurisdiction:
             240          (i) on a transaction; and
             241          (ii) in the states that are members of the agreement;
             242          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             243      member of the agreement; and
             244          (c) maintains a record of the transaction described in Subsection (16)(a)(i).
             245          (17) "Certified service provider" means an agent certified:
             246          (a) by the governing board of the agreement; and
             247          (b) to perform all of a seller's sales and use tax functions for an agreement sales and
             248      use tax other than the seller's obligation under Section 59-12-124 to remit a tax on the seller's
             249      own purchases.
             250          (18) (a) Subject to Subsection (18)(b), "clothing" means all human wearing apparel
             251      suitable for general use.
             252          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             253      the commission shall make rules:


             254          (i) listing the items that constitute "clothing"; and
             255          (ii) that are consistent with the list of items that constitute "clothing" under the
             256      agreement.
             257          (19) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
             258          (20) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
             259      fuels that does not constitute industrial use under Subsection (46) or residential use under
             260      Subsection (91).
             261          (21) (a) "Common carrier" means a person engaged in or transacting the business of
             262      transporting passengers, freight, merchandise, or other property for hire within this state.
             263          (b) (i) "Common carrier" does not include a person who, at the time the person is
             264      traveling to or from that person's place of employment, transports a passenger to or from the
             265      passenger's place of employment.
             266          (ii) For purposes of Subsection (21)(b)(i), in accordance with Title 63G, Chapter 3,
             267      Utah Administrative Rulemaking Act, the commission may make rules defining what
             268      constitutes a person's place of employment.
             269          (22) "Component part" includes:
             270          (a) poultry, dairy, and other livestock feed, and their components;
             271          (b) baling ties and twine used in the baling of hay and straw;
             272          (c) fuel used for providing temperature control of orchards and commercial
             273      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             274      off-highway type farm machinery; and
             275          (d) feed, seeds, and seedlings.
             276          (23) "Computer" means an electronic device that accepts information:
             277          (a) (i) in digital form; or
             278          (ii) in a form similar to digital form; and
             279          (b) manipulates that information for a result based on a sequence of instructions.
             280          (24) "Computer software" means a set of coded instructions designed to cause:
             281          (a) a computer to perform a task; or


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


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


             338      mail or other delivery service:
             339          (i) to:
             340          (A) a mass audience; or
             341          (B) addressees on a mailing list provided:
             342          (I) by a purchaser of the mailing list; or
             343          (II) at the discretion of the purchaser of the mailing list; and
             344          (ii) if the cost of the printed material is not billed directly to the recipients.
             345          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by
             346      a purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             347          (c) "Direct mail" does not include multiple items of printed material delivered to a
             348      single address.
             349          (32) "Directory assistance" means an ancillary service of providing:
             350          (a) address information; or
             351          (b) telephone number information.
             352          (33) (a) "Disposable home medical equipment or supplies" means medical equipment
             353      or supplies that:
             354          (i) cannot withstand repeated use; and
             355          (ii) are purchased by, for, or on behalf of a person other than:
             356          (A) a health care facility as defined in Section 26-21-2 ;
             357          (B) a health care provider as defined in Section 78B-3-403 ;
             358          (C) an office of a health care provider described in Subsection (33)(a)(ii)(B); or
             359          (D) a person similar to a person described in Subsections (33)(a)(ii)(A) through (C).
             360          (b) "Disposable home medical equipment or supplies" does not include:
             361          (i) a drug;
             362          (ii) durable medical equipment;
             363          (iii) a hearing aid;
             364          (iv) a hearing aid accessory;
             365          (v) mobility enhancing equipment; or


             366          (vi) tangible personal property used to correct impaired vision, including:
             367          (A) eyeglasses; or
             368          (B) contact lenses.
             369          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             370      commission may by rule define what constitutes medical equipment or supplies.
             371          (34) (a) "Drug" means a compound, substance, or preparation, or a component of a
             372      compound, substance, or preparation that is:
             373          (i) recognized in:
             374          (A) the official United States Pharmacopoeia;
             375          (B) the official Homeopathic Pharmacopoeia of the United States;
             376          (C) the official National Formulary; or
             377          (D) a supplement to a publication listed in Subsections (34)(a)(i)(A) through (C);
             378          (ii) intended for use in the:
             379          (A) diagnosis of disease;
             380          (B) cure of disease;
             381          (C) mitigation of disease;
             382          (D) treatment of disease; or
             383          (E) prevention of disease; or
             384          (iii) intended to affect:
             385          (A) the structure of the body; or
             386          (B) any function of the body.
             387          (b) "Drug" does not include:
             388          (i) food and food ingredients;
             389          (ii) a dietary supplement;
             390          (iii) an alcoholic beverage; or
             391          (iv) a prosthetic device.
             392          (35) (a) Except as provided in Subsection (35)(c), "durable medical equipment" means
             393      equipment that:


             394          (i) can withstand repeated use;
             395          (ii) is primarily and customarily used to serve a medical purpose;
             396          (iii) generally is not useful to a person in the absence of illness or injury; and
             397          (iv) is not worn in or on the body.
             398          (b) "Durable medical equipment" includes parts used in the repair or replacement of
             399      the equipment described in Subsection (35)(a).
             400          (c) Notwithstanding Subsection (35)(a), "durable medical equipment" does not include
             401      mobility enhancing equipment.
             402          (36) "Electronic" means:
             403          (a) relating to technology; and
             404          (b) having:
             405          (i) electrical capabilities;
             406          (ii) digital capabilities;
             407          (iii) magnetic capabilities;
             408          (iv) wireless capabilities;
             409          (v) optical capabilities;
             410          (vi) electromagnetic capabilities; or
             411          (vii) capabilities similar to Subsections (36)(b)(i) through (vi).
             412          (37) "Employee" is as defined in Section 59-10-401 .
             413          (38) "Fixed guideway" means a public transit facility that uses and occupies:
             414          (a) rail for the use of public transit; or
             415          (b) a separate right-of-way for the use of public transit.
             416          (39) "Fixed wireless service" means a telecommunications service that provides radio
             417      communication between fixed points.
             418          (40) (a) "Food and food ingredients" means substances:
             419          (i) regardless of whether the substances are in:
             420          (A) liquid form;
             421          (B) concentrated form;


             422          (C) solid form;
             423          (D) frozen form;
             424          (E) dried form; or
             425          (F) dehydrated form; and
             426          (ii) that are:
             427          (A) sold for:
             428          (I) ingestion by humans; or
             429          (II) chewing by humans; and
             430          (B) consumed for the substance's:
             431          (I) taste; or
             432          (II) nutritional value.
             433          (b) "Food and food ingredients" includes an item described in Subsection (75)(b)(iii).
             434          (c) "Food and food ingredients" does not include:
             435          (i) an alcoholic beverage;
             436          (ii) tobacco; or
             437          (iii) prepared food.
             438          (41) (a) "Fundraising sales" means sales:
             439          (i) (A) made by a school; or
             440          (B) made by a school student;
             441          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             442      materials, or provide transportation; and
             443          (iii) that are part of an officially sanctioned school activity.
             444          (b) For purposes of Subsection (41)(a)(iii), "officially sanctioned school activity"
             445      means a school activity:
             446          (i) that is conducted in accordance with a formal policy adopted by the school or
             447      school district governing the authorization and supervision of fundraising activities;
             448          (ii) that does not directly or indirectly compensate an individual teacher or other
             449      educational personnel by direct payment, commissions, or payment in kind; and


             450          (iii) the net or gross revenues from which are deposited in a dedicated account
             451      controlled by the school or school district.
             452          (42) "Geothermal energy" means energy contained in heat that continuously flows
             453      outward from the earth that is used as the sole source of energy to produce electricity.
             454          (43) "Governing board of the agreement" means the governing board of the agreement
             455      that is:
             456          (a) authorized to administer the agreement; and
             457          (b) established in accordance with the agreement.
             458          (44) (a) For purposes of Subsection 59-12-104 (41), "governmental entity" means:
             459          (i) the executive branch of the state, including all departments, institutions, boards,
             460      divisions, bureaus, offices, commissions, and committees;
             461          (ii) the judicial branch of the state, including the courts, the Judicial Council, the
             462      Office of the Court Administrator, and similar administrative units in the judicial branch;
             463          (iii) the legislative branch of the state, including the House of Representatives, the
             464      Senate, the Legislative Printing Office, the Office of Legislative Research and General
             465      Counsel, the Office of the Legislative Auditor General, and the Office of the Legislative Fiscal
             466      Analyst;
             467          (iv) the National Guard;
             468          (v) an independent entity as defined in Section 63E-1-102 ; or
             469          (vi) a political subdivision as defined in Section 17B-1-102 .
             470          (b) "Governmental entity" does not include the state systems of public and higher
             471      education, including:
             472          (i) a college campus of the Utah College of Applied Technology;
             473          (ii) a school;
             474          (iii) the State Board of Education;
             475          (iv) the State Board of Regents; or
             476          (v) a state institution of higher education as defined in Section 53B-3-102 .
             477          (45) "Hydroelectric energy" means water used as the sole source of energy to produce


             478      electricity.
             479          (46) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
             480      other fuels:
             481          (a) in mining or extraction of minerals;
             482          (b) in agricultural operations to produce an agricultural product up to the time of
             483      harvest or placing the agricultural product into a storage facility, including:
             484          (i) commercial greenhouses;
             485          (ii) irrigation pumps;
             486          (iii) farm machinery;
             487          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             488      registered under Title 41, Chapter 1a, Part 2, Registration; and
             489          (v) other farming activities;
             490          (c) in manufacturing tangible personal property at an establishment described in SIC
             491      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             492      Executive Office of the President, Office of Management and Budget;
             493          (d) by a scrap recycler if:
             494          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             495      one or more of the following items into prepared grades of processed materials for use in new
             496      products:
             497          (A) iron;
             498          (B) steel;
             499          (C) nonferrous metal;
             500          (D) paper;
             501          (E) glass;
             502          (F) plastic;
             503          (G) textile; or
             504          (H) rubber; and
             505          (ii) the new products under Subsection (46)(d)(i) would otherwise be made with


             506      nonrecycled materials; or
             507          (e) in producing a form of energy or steam described in Subsection 54-2-1 (2)(a) by a
             508      cogeneration facility as defined in Section 54-2-1 .
             509          (47) (a) Except as provided in Subsection (47)(b), "installation charge" means a
             510      charge for installing:
             511          (i) tangible personal property; or
             512          (ii) a product transferred electronically.
             513          (b) "Installation charge" does not include a charge for repairs or renovations of:
             514          (i) tangible personal property; or
             515          (ii) a product transferred electronically.
             516          (48) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             517      personal property or a product transferred electronically for:
             518          (i) (A) a fixed term; or
             519          (B) an indeterminate term; and
             520          (ii) consideration.
             521          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if
             522      the amount of consideration may be increased or decreased by reference to the amount realized
             523      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             524      Code.
             525          (c) "Lease" or "rental" does not include:
             526          (i) a transfer of possession or control of property under a security agreement or
             527      deferred payment plan that requires the transfer of title upon completion of the required
             528      payments;
             529          (ii) a transfer of possession or control of property under an agreement that requires the
             530      transfer of title:
             531          (A) upon completion of required payments; and
             532          (B) if the payment of an option price does not exceed the greater of:
             533          (I) $100; or


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


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


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


             618      use taxes other than the seller's obligation under Section 59-12-124 to remit a tax on the
             619      seller's own purchases.
             620          (59) "Model 2 seller" means a seller that:
             621          (a) except as provided in Subsection (59)(b), has selected a certified automated system
             622      to perform the seller's sales tax functions for agreement sales and use taxes; and
             623          (b) notwithstanding Subsection (59)(a), retains responsibility for remitting all of the
             624      sales tax:
             625          (i) collected by the seller; and
             626          (ii) to the appropriate local taxing jurisdiction.
             627          (60) (a) Subject to Subsection (60)(b), "model 3 seller" means a seller that has:
             628          (i) sales in at least five states that are members of the agreement;
             629          (ii) total annual sales revenues of at least $500,000,000;
             630          (iii) a proprietary system that calculates the amount of tax:
             631          (A) for an agreement sales and use tax; and
             632          (B) due to each local taxing jurisdiction; and
             633          (iv) entered into a performance agreement with the governing board of the agreement.
             634          (b) For purposes of Subsection (60)(a), "model 3 seller" includes an affiliated group of
             635      sellers using the same proprietary system.
             636          (61) "Modular home" means a modular unit as defined in Section 58-56-3 .
             637          (62) "Motor vehicle" is as defined in Section 41-1a-102 .
             638          (63) "Oil shale" means a group of fine black to dark brown shales containing
             639      bituminous material that yields petroleum upon distillation.
             640          (64) (a) "Other fuels" means products that burn independently to produce heat or
             641      energy.
             642          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             643      personal property.
             644          (65) (a) "Paging service" means a telecommunications service that provides
             645      transmission of a coded radio signal for the purpose of activating a specific pager.


             646          (b) For purposes of Subsection (65)(a), the transmission of a coded radio signal
             647      includes a transmission by message or sound.
             648          (66) "Pawnbroker" is as defined in Section 13-32a-102 .
             649          (67) "Pawn transaction" is as defined in Section 13-32a-102 .
             650          (68) (a) "Permanently attached to real property" means that for tangible personal
             651      property attached to real property:
             652          (i) the attachment of the tangible personal property to the real property:
             653          (A) is essential to the use of the tangible personal property; and
             654          (B) suggests that the tangible personal property will remain attached to the real
             655      property in the same place over the useful life of the tangible personal property; or
             656          (ii) if the tangible personal property is detached from the real property, the detachment
             657      would:
             658          (A) cause substantial damage to the tangible personal property; or
             659          (B) require substantial alteration or repair of the real property to which the tangible
             660      personal property is attached.
             661          (b) "Permanently attached to real property" includes:
             662          (i) the attachment of an accessory to the tangible personal property if the accessory is:
             663          (A) essential to the operation of the tangible personal property; and
             664          (B) attached only to facilitate the operation of the tangible personal property;
             665          (ii) a temporary detachment of tangible personal property from real property for a
             666      repair or renovation if the repair or renovation is performed where the tangible personal
             667      property and real property are located; or
             668          (iii) property attached to oil, gas, or water pipelines, except for the property listed in
             669      Subsection (68)(c)(iii) or (iv).
             670          (c) "Permanently attached to real property" does not include:
             671          (i) the attachment of portable or movable tangible personal property to real property if
             672      that portable or movable tangible personal property is attached to real property only for:
             673          (A) convenience;


             674          (B) stability; or
             675          (C) for an obvious temporary purpose;
             676          (ii) the detachment of tangible personal property from real property except for the
             677      detachment described in Subsection (68)(b)(ii);
             678          (iii) an attachment of the following tangible personal property to real property if the
             679      attachment to real property is only through a line that supplies water, electricity, gas,
             680      telecommunications, cable, or supplies a similar item as determined by the commission by rule
             681      made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
             682          (A) a computer;
             683          (B) a telephone;
             684          (C) a television; or
             685          (D) tangible personal property similar to Subsections (68)(c)(iii)(A) through (C) as
             686      determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             687      Administrative Rulemaking Act; or
             688          (iv) an item listed in Subsection (108)(c).
             689          (69) "Person" includes any individual, firm, partnership, joint venture, association,
             690      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             691      municipality, district, or other local governmental entity of the state, or any group or
             692      combination acting as a unit.
             693          (70) "Place of primary use":
             694          (a) for telecommunications service other than mobile telecommunications service,
             695      means the street address representative of where the customer's use of the telecommunications
             696      service primarily occurs, which shall be:
             697          (i) the residential street address of the customer; or
             698          (ii) the primary business street address of the customer; or
             699          (b) for mobile telecommunications service, is as defined in the Mobile
             700      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             701          (71) (a) "Postpaid calling service" means a telecommunications service a person


             702      obtains by making a payment on a call-by-call basis:
             703          (i) through the use of a:
             704          (A) bank card;
             705          (B) credit card;
             706          (C) debit card; or
             707          (D) travel card; or
             708          (ii) by a charge made to a telephone number that is not associated with the origination
             709      or termination of the telecommunications service.
             710          (b) "Postpaid calling service" includes a service, except for a prepaid wireless calling
             711      service, that would be a prepaid wireless calling service if the service were exclusively a
             712      telecommunications service.
             713          (72) "Postproduction" means an activity related to the finishing or duplication of a
             714      medium described in Subsection 59-12-104 (54)(a).
             715          (73) "Prepaid calling service" means a telecommunications service:
             716          (a) that allows a purchaser access to telecommunications service that is exclusively
             717      telecommunications service;
             718          (b) that:
             719          (i) is paid for in advance; and
             720          (ii) enables the origination of a call using an:
             721          (A) access number; or
             722          (B) authorization code;
             723          (c) that is dialed:
             724          (i) manually; or
             725          (ii) electronically; and
             726          (d) sold in predetermined units or dollars that decline:
             727          (i) by a known amount; and
             728          (ii) with use.
             729          (74) "Prepaid wireless calling service" means a telecommunications service:


             730          (a) that provides the right to utilize:
             731          (i) mobile wireless service; and
             732          (ii) other service that is not a telecommunications service, including:
             733          (A) the download of a product transferred electronically;
             734          (B) a content service; or
             735          (C) an ancillary service;
             736          (b) that:
             737          (i) is paid for in advance; and
             738          (ii) enables the origination of a call using an:
             739          (A) access number; or
             740          (B) authorization code;
             741          (c) that is dialed:
             742          (i) manually; or
             743          (ii) electronically; and
             744          (d) sold in predetermined units or dollars that decline:
             745          (i) by a known amount; and
             746          (ii) with use.
             747          (75) (a) "Prepared food" means:
             748          (i) food:
             749          (A) sold in a heated state; or
             750          (B) heated by a seller;
             751          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             752      item; or
             753          (iii) except as provided in Subsection (75)(c), food sold with an eating utensil
             754      provided by the seller, including a:
             755          (A) plate;
             756          (B) knife;
             757          (C) fork;


             758          (D) spoon;
             759          (E) glass;
             760          (F) cup;
             761          (G) napkin; or
             762          (H) straw.
             763          (b) "Prepared food" does not include:
             764          (i) food that a seller only:
             765          (A) cuts;
             766          (B) repackages; or
             767          (C) pasteurizes; or
             768          (ii) (A) the following:
             769          (I) raw egg;
             770          (II) raw fish;
             771          (III) raw meat;
             772          (IV) raw poultry; or
             773          (V) a food containing an item described in Subsections (75)(b)(ii)(A)(I) through (IV);
             774      and
             775          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             776      Food and Drug Administration's Food Code that a consumer cook the items described in
             777      Subsection (75)(b)(ii)(A) to prevent food borne illness; or
             778          (iii) the following if sold without eating utensils provided by the seller:
             779          (A) food and food ingredients sold by a seller if the seller's proper primary
             780      classification under the 2002 North American Industry Classification System of the federal
             781      Executive Office of the President, Office of Management and Budget, is manufacturing in
             782      Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
             783      Manufacturing;
             784          (B) food and food ingredients sold in an unheated state:
             785          (I) by weight or volume; and


             786          (II) as a single item; or
             787          (C) a bakery item, including:
             788          (I) a bagel;
             789          (II) a bar;
             790          (III) a biscuit;
             791          (IV) bread;
             792          (V) a bun;
             793          (VI) a cake;
             794          (VII) a cookie;
             795          (VIII) a croissant;
             796          (IX) a danish;
             797          (X) a donut;
             798          (XI) a muffin;
             799          (XII) a pastry;
             800          (XIII) a pie;
             801          (XIV) a roll;
             802          (XV) a tart;
             803          (XVI) a torte; or
             804          (XVII) a tortilla.
             805          (c) Notwithstanding Subsection (75)(a)(iii), an eating utensil provided by the seller
             806      does not include the following used to transport the food:
             807          (i) a container; or
             808          (ii) packaging.
             809          (76) "Prescription" means an order, formula, or recipe that is issued:
             810          (a) (i) orally;
             811          (ii) in writing;
             812          (iii) electronically; or
             813          (iv) by any other manner of transmission; and


             814          (b) by a licensed practitioner authorized by the laws of a state.
             815          (77) (a) Except as provided in Subsection (77)(b)(ii) or (iii), "prewritten computer
             816      software" means computer software that is not designed and developed:
             817          (i) by the author or other creator of the computer software; and
             818          (ii) to the specifications of a specific purchaser.
             819          (b) "Prewritten computer software" includes:
             820          (i) a prewritten upgrade to computer software if the prewritten upgrade to the
             821      computer software is not designed and developed:
             822          (A) by the author or other creator of the computer software; and
             823          (B) to the specifications of a specific purchaser;
             824          (ii) notwithstanding Subsection (77)(a), computer software designed and developed by
             825      the author or other creator of the computer software to the specifications of a specific
             826      purchaser if the computer software is sold to a person other than the purchaser; or
             827          (iii) notwithstanding Subsection (77)(a) and except as provided in Subsection (77)(c),
             828      prewritten computer software or a prewritten portion of prewritten computer software:
             829          (A) that is modified or enhanced to any degree; and
             830          (B) if the modification or enhancement described in Subsection (77)(b)(iii)(A) is
             831      designed and developed to the specifications of a specific purchaser.
             832          (c) Notwithstanding Subsection (77)(b)(iii), "prewritten computer software" does not
             833      include a modification or enhancement described in Subsection (77)(b)(iii) if the charges for
             834      the modification or enhancement are:
             835          (i) reasonable; and
             836          (ii) separately stated on the invoice or other statement of price provided to the
             837      purchaser.
             838          (78) (a) "Private communication service" means a telecommunications service:
             839          (i) that entitles a customer to exclusive or priority use of one or more communications
             840      channels between or among termination points; and
             841          (ii) regardless of the manner in which the one or more communications channels are


             842      connected.
             843          (b) "Private communications service" includes the following provided in connection
             844      with the use of one or more communications channels:
             845          (i) an extension line;
             846          (ii) a station;
             847          (iii) switching capacity; or
             848          (iv) another associated service that is provided in connection with the use of one or
             849      more communications channels as defined in Section 59-12-215 .
             850          (79) (a) "Prosthetic device" means a device that is worn on or in the body to:
             851          (i) artificially replace a missing portion of the body;
             852          (ii) prevent or correct a physical deformity or physical malfunction; or
             853          (iii) support a weak or deformed portion of the body.
             854          (b) "Prosthetic device" includes:
             855          (i) parts used in the repairs or renovation of a prosthetic device;
             856          (ii) replacement parts for a prosthetic device;
             857          (iii) a dental prosthesis; or
             858          (iv) a hearing aid.
             859          (c) "Prosthetic device" does not include:
             860          (i) corrective eyeglasses; or
             861          (ii) contact lenses.
             862          (80) (a) "Protective equipment" means an item:
             863          (i) for human wear; and
             864          (ii) that is:
             865          (A) designed as protection:
             866          (I) to the wearer against injury or disease; or
             867          (II) against damage or injury of other persons or property; and
             868          (B) not suitable for general use.
             869          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,


             870      the commission shall make rules:
             871          (i) listing the items that constitute "protective equipment"; and
             872          (ii) that are consistent with the list of items that constitute "protective equipment"
             873      under the agreement.
             874          (81) (a) For purposes of Subsection 59-12-104 (41), "publication" means any written
             875      or printed matter, other than a photocopy:
             876          (i) regardless of:
             877          (A) characteristics;
             878          (B) copyright;
             879          (C) form;
             880          (D) format;
             881          (E) method of reproduction; or
             882          (F) source; and
             883          (ii) made available in printed or electronic format.
             884          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             885      the commission may by rule define the term "photocopy."
             886          (82) (a) "Purchase price" and "sales price" mean the total amount of consideration:
             887          (i) valued in money; and
             888          (ii) for which tangible personal property, a product transferred electronically, or
             889      services are:
             890          (A) sold;
             891          (B) leased; or
             892          (C) rented.
             893          (b) "Purchase price" and "sales price" include:
             894          (i) the seller's cost of the tangible personal property, a product transferred
             895      electronically, or services sold;
             896          (ii) expenses of the seller, including:
             897          (A) the cost of materials used;


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


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


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


             982          (ii) at an institution, including a nursing home or a school, if the telecommunications
             983      service or ancillary service is provided to and paid for by the individual residing at the
             984      institution rather than the institution.
             985          (b) For purposes of Subsection (90)(a), a residential address includes an:
             986          (i) apartment; or
             987          (ii) other individual dwelling unit.
             988          (91) "Residential use" means the use in or around a home, apartment building,
             989      sleeping quarters, and similar facilities or accommodations.
             990          (92) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose other
             991      than:
             992          (a) resale;
             993          (b) sublease; or
             994          (c) subrent.
             995          (93) (a) "Retailer" means any person engaged in a regularly organized business in
             996      tangible personal property or any other taxable transaction under Subsection 59-12-103 (1),
             997      and who is selling to the user or consumer and not for resale.
             998          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             999      engaged in the business of selling to users or consumers within the state.
             1000          (94) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             1001      otherwise, in any manner, of tangible personal property or any other taxable transaction under
             1002      Subsection 59-12-103 (1), for consideration.
             1003          (b) "Sale" includes:
             1004          (i) installment and credit sales;
             1005          (ii) any closed transaction constituting a sale;
             1006          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
             1007      chapter;
             1008          (iv) any transaction if the possession of property is transferred but the seller retains the
             1009      title as security for the payment of the price; and


             1010          (v) any transaction under which right to possession, operation, or use of any article of
             1011      tangible personal property is granted under a lease or contract and the transfer of possession
             1012      would be taxable if an outright sale were made.
             1013          (95) "Sale at retail" is as defined in Subsection (92).
             1014          (96) "Sale-leaseback transaction" means a transaction by which title to tangible
             1015      personal property or a product transferred electronically that is subject to a tax under this
             1016      chapter is transferred:
             1017          (a) by a purchaser-lessee;
             1018          (b) to a lessor;
             1019          (c) for consideration; and
             1020          (d) if:
             1021          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             1022      of the tangible personal property or product transferred electronically;
             1023          (ii) the sale of the tangible personal property or product transferred electronically to
             1024      the lessor is intended as a form of financing:
             1025          (A) for the tangible personal property or product transferred electronically; and
             1026          (B) to the purchaser-lessee; and
             1027          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             1028      is required to:
             1029          (A) capitalize the tangible personal property or product transferred electronically for
             1030      financial reporting purposes; and
             1031          (B) account for the lease payments as payments made under a financing arrangement.
             1032          (97) "Sales price" is as defined in Subsection (82).
             1033          (98) (a) "Sales relating to schools" means the following sales by, amounts paid to, or
             1034      amounts charged by a school:
             1035          (i) sales that are directly related to the school's educational functions or activities
             1036      including:
             1037          (A) the sale of:


             1038          (I) textbooks;
             1039          (II) textbook fees;
             1040          (III) laboratory fees;
             1041          (IV) laboratory supplies; or
             1042          (V) safety equipment;
             1043          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             1044      that:
             1045          (I) a student is specifically required to wear as a condition of participation in a
             1046      school-related event or school-related activity; and
             1047          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             1048      place of ordinary clothing;
             1049          (C) sales of the following if the net or gross revenues generated by the sales are
             1050      deposited into a school district fund or school fund dedicated to school meals:
             1051          (I) food and food ingredients; or
             1052          (II) prepared food; or
             1053          (D) transportation charges for official school activities; or
             1054          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             1055      event or school-related activity.
             1056          (b) "Sales relating to schools" does not include:
             1057          (i) bookstore sales of items that are not educational materials or supplies;
             1058          (ii) except as provided in Subsection (98)(a)(i)(B):
             1059          (A) clothing;
             1060          (B) clothing accessories or equipment;
             1061          (C) protective equipment; or
             1062          (D) sports or recreational equipment; or
             1063          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             1064      event or school-related activity if the amounts paid or charged are passed through to a person:
             1065          (A) other than a:


             1066          (I) school;
             1067          (II) nonprofit organization authorized by a school board or a governing body of a
             1068      private school to organize and direct a competitive secondary school activity; or
             1069          (III) nonprofit association authorized by a school board or a governing body of a
             1070      private school to organize and direct a competitive secondary school activity; and
             1071          (B) that is required to collect sales and use taxes under this chapter.
             1072          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1073      commission may make rules defining the term "passed through."
             1074          (99) For purposes of this section and Section 59-12-104 , "school":
             1075          (a) means:
             1076          (i) an elementary school or a secondary school that:
             1077          (A) is a:
             1078          (I) public school; or
             1079          (II) private school; and
             1080          (B) provides instruction for one or more grades kindergarten through 12; or
             1081          (ii) a public school district; and
             1082          (b) includes the Electronic High School as defined in Section 53A-15-1002 .
             1083          (100) "Seller" means a person that makes a sale, lease, or rental of:
             1084          (a) tangible personal property;
             1085          (b) a product transferred electronically; or
             1086          (c) a service.
             1087          (101) (a) "Semiconductor fabricating, processing, research, or development materials"
             1088      means tangible personal property or a product transferred electronically if the tangible personal
             1089      property or product transferred electronically is:
             1090          (i) used primarily in the process of:
             1091          (A) (I) manufacturing a semiconductor;
             1092          (II) fabricating a semiconductor; or
             1093          (III) research or development of a:


             1094          (Aa) semiconductor; or
             1095          (Bb) semiconductor manufacturing process; or
             1096          (B) maintaining an environment suitable for a semiconductor; or
             1097          (ii) consumed primarily in the process of:
             1098          (A) (I) manufacturing a semiconductor;
             1099          (II) fabricating a semiconductor; or
             1100          (III) research or development of a:
             1101          (Aa) semiconductor; or
             1102          (Bb) semiconductor manufacturing process; or
             1103          (B) maintaining an environment suitable for a semiconductor.
             1104          (b) "Semiconductor fabricating, processing, research, or development materials"
             1105      includes:
             1106          (i) parts used in the repairs or renovations of tangible personal property or a product
             1107      transferred electronically described in Subsection (101)(a); or
             1108          (ii) a chemical, catalyst, or other material used to:
             1109          (A) produce or induce in a semiconductor a:
             1110          (I) chemical change; or
             1111          (II) physical change;
             1112          (B) remove impurities from a semiconductor; or
             1113          (C) improve the marketable condition of a semiconductor.
             1114          (102) "Senior citizen center" means a facility having the primary purpose of providing
             1115      services to the aged as defined in Section 62A-3-101 .
             1116          (103) "Simplified electronic return" means the electronic return:
             1117          (a) described in Section 318(C) of the agreement; and
             1118          (b) approved by the governing board of the agreement.
             1119          (104) "Solar energy" means the sun used as the sole source of energy for producing
             1120      electricity.
             1121          (105) (a) "Sports or recreational equipment" means an item:


             1122          (i) designed for human use; and
             1123          (ii) that is:
             1124          (A) worn in conjunction with:
             1125          (I) an athletic activity; or
             1126          (II) a recreational activity; and
             1127          (B) not suitable for general use.
             1128          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1129      the commission shall make rules:
             1130          (i) listing the items that constitute "sports or recreational equipment"; and
             1131          (ii) that are consistent with the list of items that constitute "sports or recreational
             1132      equipment" under the agreement.
             1133          (106) "State" means the state of Utah, its departments, and agencies.
             1134          (107) "Storage" means any keeping or retention of tangible personal property or any
             1135      other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except
             1136      sale in the regular course of business.
             1137          (108) (a) Except as provided in Subsection (108) (d) or (e), "tangible personal
             1138      property" means personal property that:
             1139          (i) may be:
             1140          (A) seen;
             1141          (B) weighed;
             1142          (C) measured;
             1143          (D) felt; or
             1144          (E) touched; or
             1145          (ii) is in any manner perceptible to the senses.
             1146          (b) "Tangible personal property" includes:
             1147          (i) electricity;
             1148          (ii) water;
             1149          (iii) gas;


             1150          (iv) steam; or
             1151          (v) prewritten computer software.
             1152          (c) "Tangible personal property" includes the following regardless of whether the item
             1153      is attached to real property:
             1154          (i) a dishwasher;
             1155          (ii) a dryer;
             1156          (iii) a freezer;
             1157          (iv) a microwave;
             1158          (v) a refrigerator;
             1159          (vi) a stove;
             1160          (vii) a washer; or
             1161          (viii) an item similar to Subsections (108)(c)(i) through (vii) as determined by the
             1162      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1163      Rulemaking Act.
             1164          (d) "Tangible personal property" does not include a product that is transferred
             1165      electronically.
             1166          (e) "Tangible personal property" does not include the following if attached to real
             1167      property, regardless of whether the attachment to real property is only through a line that
             1168      supplies water, electricity, gas, telephone, cable, or supplies a similar item as determined by
             1169      the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1170      Rulemaking Act:
             1171          (i) a hot water heater;
             1172          (ii) a water filtration system; or
             1173          (iii) a water softener system.
             1174          (109) "Tar sands" means impregnated sands that yield mixtures of liquid hydrocarbon
             1175      and require further processing other than mechanical blending before becoming finished
             1176      petroleum products.
             1177          (110) (a) "Telecommunications enabling or facilitating equipment, machinery, or


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


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


             1234          (Cc) processed;
             1235          (Dd) retrieved; or
             1236          (Ee) stored; and
             1237          (II) delivered by an electronic transmission to a purchaser; and
             1238          (B) the purchaser's primary purpose for the underlying transaction is the processed
             1239      data or information;
             1240          (v) installation or maintenance of the following on a customer's premises:
             1241          (A) equipment; or
             1242          (B) wiring;
             1243          (vi) Internet access service;
             1244          (vii) a paging service;
             1245          (viii) a product transferred electronically, including:
             1246          (A) music;
             1247          (B) reading material;
             1248          (C) a ring tone;
             1249          (D) software; or
             1250          (E) video;
             1251          (ix) a radio and television audio and video programming service:
             1252          (A) regardless of the medium; and
             1253          (B) including:
             1254          (I) furnishing conveyance, routing, or transmission of a television audio and video
             1255      programming service by a programming service provider;
             1256          (II) cable service as defined in 47 U.S.C. Sec. 522(6); or
             1257          (III) audio and video programming services delivered by a commercial mobile radio
             1258      service provider as defined in 47 C.F.R. Sec. 20.3;
             1259          (x) a value-added nonvoice data service; or
             1260          (xi) tangible personal property.
             1261          (114) (a) "Telecommunications service provider" means a person that:


             1262          (i) owns, controls, operates, or manages a telecommunications service; and
             1263          (ii) engages in an activity described in Subsection (114)(a)(i) for the shared use with
             1264      or resale to any person of the telecommunications service.
             1265          (b) A person described in Subsection (114)(a) is a telecommunications service
             1266      provider whether or not the Public Service Commission of Utah regulates:
             1267          (i) that person; or
             1268          (ii) the telecommunications service that the person owns, controls, operates, or
             1269      manages.
             1270          (115) (a) "Telecommunications switching or routing equipment, machinery, or
             1271      software" means an item listed in Subsection (115)(b) if that item is purchased or leased
             1272      primarily for switching or routing:
             1273          (i) an ancillary service;
             1274          (ii) data communications;
             1275          (iii) voice communications; or
             1276          (iv) telecommunications service.
             1277          (b) The following apply to Subsection (115)(a):
             1278          (i) a bridge;
             1279          (ii) a computer;
             1280          (iii) a cross connect;
             1281          (iv) a modem;
             1282          (v) a multiplexer;
             1283          (vi) plug in circuitry;
             1284          (vii) a router;
             1285          (viii) software;
             1286          (ix) a switch; or
             1287          (x) equipment, machinery, or software that functions similarly to an item listed in
             1288      Subsections (115)(b)(i) through (ix) as determined by the commission by rule made in
             1289      accordance with Subsection (115)(c).


             1290          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1291      commission may by rule define what constitutes equipment, machinery, or software that
             1292      functions similarly to an item listed in Subsections (115)(b)(i) through (ix).
             1293          (116) (a) "Telecommunications transmission equipment, machinery, or software"
             1294      means an item listed in Subsection (116)(b) if that item is purchased or leased primarily for
             1295      sending, receiving, or transporting:
             1296          (i) an ancillary service;
             1297          (ii) data communications;
             1298          (iii) voice communications; or
             1299          (iv) telecommunications service.
             1300          (b) The following apply to Subsection (116)(a):
             1301          (i) an amplifier;
             1302          (ii) a cable;
             1303          (iii) a closure;
             1304          (iv) a conduit;
             1305          (v) a controller;
             1306          (vi) a duplexer;
             1307          (vii) a filter;
             1308          (viii) an input device;
             1309          (ix) an input/output device;
             1310          (x) an insulator;
             1311          (xi) microwave machinery or equipment;
             1312          (xii) an oscillator;
             1313          (xiii) an output device;
             1314          (xiv) a pedestal;
             1315          (xv) a power converter;
             1316          (xvi) a power supply;
             1317          (xvii) a radio channel;


             1318          (xviii) a radio receiver;
             1319          (xix) a radio transmitter;
             1320          (xx) a repeater;
             1321          (xxi) software;
             1322          (xxii) a terminal;
             1323          (xxiii) a timing unit;
             1324          (xxiv) a transformer;
             1325          (xxv) a wire; or
             1326          (xxvi) equipment, machinery, or software that functions similarly to an item listed in
             1327      Subsections (116)(b)(i) through (xxv) as determined by the commission by rule made in
             1328      accordance with Subsection (116)(c).
             1329          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1330      commission may by rule define what constitutes equipment, machinery, or software that
             1331      functions similarly to an item listed in Subsections (116)(b)(i) through (xxv).
             1332          (117) "Tobacco" means:
             1333          (a) a cigarette;
             1334          (b) a cigar;
             1335          (c) chewing tobacco;
             1336          (d) pipe tobacco; or
             1337          (e) any other item that contains tobacco.
             1338          (118) "Unassisted amusement device" means an amusement device, skill device, or
             1339      ride device that is started and stopped by the purchaser or renter of the right to use or operate
             1340      the amusement device, skill device, or ride device.
             1341          (119) (a) "Use" means the exercise of any right or power over tangible personal
             1342      property, a product transferred electronically, or a service under Subsection 59-12-103 (1),
             1343      incident to the ownership or the leasing of that tangible personal property, product transferred
             1344      electronically, or service.
             1345          (b) "Use" does not include the sale, display, demonstration, or trial of tangible


             1346      personal property, a product transferred electronically, or a service in the regular course of
             1347      business and held for resale.
             1348          (120) "Value-added nonvoice data service" means a service:
             1349          (a) that otherwise meets the definition of a telecommunications service except that a
             1350      computer processing application is used to act primarily for a purpose other than conveyance,
             1351      routing, or transmission; and
             1352          (b) with respect to which a computer processing application is used to act on data or
             1353      information:
             1354          (i) code;
             1355          (ii) content;
             1356          (iii) form; or
             1357          (iv) protocol.
             1358          (121) (a) Subject to Subsection (121)(b), "vehicle" means the following that are
             1359      required to be titled, registered, or titled and registered:
             1360          (i) an aircraft as defined in Section 72-10-102 ;
             1361          (ii) a vehicle as defined in Section 41-1a-102 ;
             1362          (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
             1363          (iv) a vessel as defined in Section 41-1a-102 .
             1364          (b) For purposes of Subsection 59-12-104 (33) only, "vehicle" includes:
             1365          (i) a vehicle described in Subsection (121)(a); or
             1366          (ii) (A) a locomotive;
             1367          (B) a freight car;
             1368          (C) railroad work equipment; or
             1369          (D) other railroad rolling stock.
             1370          (122) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             1371      exchanging a vehicle as defined in Subsection (121).
             1372          (123) (a) "Vertical service" means an ancillary service that:
             1373          (i) is offered in connection with one or more telecommunications services; and


             1374          (ii) offers an advanced calling feature that allows a customer to:
             1375          (A) identify a caller; and
             1376          (B) manage multiple calls and call connections.
             1377          (b) "Vertical service" includes an ancillary service that allows a customer to manage a
             1378      conference bridging service.
             1379          (124) (a) "Voice mail service" means an ancillary service that enables a customer to
             1380      receive, send, or store a recorded message.
             1381          (b) "Voice mail service" does not include a vertical service that a customer is required
             1382      to have in order to utilize a voice mail service.
             1383          (125) (a) Except as provided in Subsection (125)(b), "waste energy facility" means a
             1384      facility that generates electricity:
             1385          (i) using as the primary source of energy waste materials that would be placed in a
             1386      landfill or refuse pit if it were not used to generate electricity, including:
             1387          (A) tires;
             1388          (B) waste coal; or
             1389          (C) oil shale; and
             1390          (ii) in amounts greater than actually required for the operation of the facility.
             1391          (b) "Waste energy facility" does not include a facility that incinerates:
             1392          (i) municipal solid waste;
             1393          (ii) hospital waste as defined in 40 C.F.R. 60.51c; or
             1394          (iii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
             1395          (126) "Watercraft" means a vessel as defined in Section 73-18-2 .
             1396          (127) "Wind energy" means wind used as the sole source of energy to produce
             1397      electricity.
             1398          (128) "ZIP Code" means a Zoning Improvement Plan Code assigned to a geographic
             1399      location by the United States Postal Service.
             1400          Section 2. Section 59-12-211 is amended to read:
             1401           59-12-211. Definitions -- Location of certain transactions -- Reports to


             1402      commission -- Direct payment provision for a seller making certain purchases --
             1403      Exceptions.
             1404          (1) As used in this section:
             1405          (a) (i) "Receipt" and "receive" mean:
             1406          (A) taking possession of tangible personal property;
             1407          (B) making first use of a service; or
             1408          (C) for a product transferred electronically, the earlier of:
             1409          (I) taking possession of the product transferred electronically; or
             1410          (II) making first use of the product transferred electronically.
             1411          (ii) "Receipt" and "receive" do not include possession by a shipping company on
             1412      behalf of a purchaser.
             1413          (b) "Transportation equipment" means:
             1414          (i) a locomotive or rail car that is used to carry a person or property in interstate
             1415      commerce;
             1416          (ii) a truck or truck-tractor:
             1417          (A) with a gross vehicle weight rating of 10,001 pounds or more;
             1418          (B) registered under Section 41-1a-301 ; and
             1419          (C) operated under the authority of a carrier authorized and certificated:
             1420          (I) by the United States Department of Transportation or another federal authority; and
             1421          (II) to engage in carrying a person or property in interstate commerce;
             1422          (iii) a trailer, semitrailer, or passenger bus that is:
             1423          (A) registered under Section 41-1a-301 ; and
             1424          (B) operated under the authority of a carrier authorized and certificated:
             1425          (I) by the United States Department of Transportation or another federal authority; and
             1426          (II) to engage in carrying a person or property in interstate commerce;
             1427          (iv) an aircraft that is operated by an air carrier authorized and certificated:
             1428          (A) by the United States Department of Transportation or another federal or foreign
             1429      authority; and


             1430          (B) to engage in carrying a person or property in interstate commerce; or
             1431          (v) a container designed for use on, or a component part attached or secured on, an
             1432      item of equipment listed in[,] Subsections (1)(b)(i) through (iv).
             1433          (2) Except as provided in Subsections (8) and (13), if tangible personal property, a
             1434      product transferred electronically, or a service that is subject to taxation under this chapter is
             1435      received by a purchaser at a business location of a seller, the location of the transaction is the
             1436      business location of the seller.
             1437          (3) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9),
             1438      (11), and (13), if tangible personal property, a product transferred electronically, or a service
             1439      that is subject to taxation under this chapter is not received by a purchaser at a business
             1440      location of a seller, the location of the transaction is the location where the purchaser takes
             1441      receipt of the tangible personal property or service.
             1442          (4) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9),
             1443      (11), and (13), if Subsection (2) or (3) does not apply, the location of the transaction is the
             1444      location indicated by an address for or other information on the purchaser if:
             1445          (a) the address or other information is available from the seller's business records; and
             1446          (b) use of the address or other information from the seller's records does not constitute
             1447      bad faith.
             1448          (5) (a) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9),
             1449      (11), and (13), if Subsection (2), (3), or (4) does not apply, the location of the transaction is
             1450      the location indicated by an address for the purchaser if:
             1451          (i) the address is obtained during the consummation of the transaction; and
             1452          (ii) use of the address described in Subsection (5)(a)(i) does not constitute bad faith.
             1453          (b) An address used under Subsection (5)(a) includes the address of a purchaser's
             1454      payment instrument if no other address is available.
             1455          (6) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9),
             1456      (11), and (13), if Subsection (2), (3), (4), or (5) does not apply or if a seller does not have
             1457      sufficient information to apply Subsection (2), (3), (4), or (5), the location of the transaction is


             1458      the location:
             1459          (a) indicated by the address from which:
             1460          [(a)] (i) except as provided in Subsection (6)[(b)](a)(ii), for tangible personal property
             1461      that is subject to taxation under this chapter, the tangible personal property is shipped;
             1462          [(b)] (ii) for computer software delivered electronically or for a product transferred
             1463      electronically that is subject to taxation under this chapter, the computer software or product
             1464      transferred electronically is first available for transmission by the seller; or
             1465          [(c)] (iii) for a service that is subject to taxation under this chapter, the service is
             1466      provided[.]; or
             1467          (b) as determined by the seller with respect to a prepaid wireless calling service:
             1468          (i) provided in Subsection (6)(a)(iii); or
             1469          (ii) associated with the mobile telephone number.
             1470          (7) (a) For purposes of this Subsection (7), "shared ZIP Code" means a nine-digit ZIP
             1471      Code that is located within two or more local taxing jurisdictions.
             1472          (b) If the location of a transaction determined under Subsections (3) through (6) is in a
             1473      shared ZIP Code, the location of the transaction is:
             1474          (i) if there is only one local taxing jurisdiction that imposes the lowest agreement
             1475      combined tax rate for the shared ZIP Code, the local taxing jurisdiction that imposes the
             1476      lowest agreement combined tax rate; or
             1477          (ii) if two or more local taxing jurisdictions impose the lowest agreement combined
             1478      tax rate for the shared ZIP Code, the local taxing jurisdiction that:
             1479          (A) imposes the lowest agreement combined tax rate for the shared ZIP Code; and
             1480          (B) has located within the local taxing jurisdiction the largest number of street
             1481      addresses within the shared ZIP Code.
             1482          (c) For purposes of Subsection (7)(b), a seller shall collect a tax imposed under this
             1483      chapter at the lowest agreement combined tax rate imposed within the local taxing jurisdiction
             1484      in which the transaction is located under Subsection (7)(b) notwithstanding:
             1485          (i) Section 59-12-204 ;


             1486          (ii) Section 59-12-401 ;
             1487          (iii) Section 59-12-402 ;
             1488          (iv) Section 59-12-501 ;
             1489          (v) Section 59-12-502 ;
             1490          (vi) Section 59-12-703 ;
             1491          (vii) Section 59-12-802 ;
             1492          (viii) Section 59-12-804 ;
             1493          (ix) Section 59-12-1001 ;
             1494          (x) Section 59-12-1102 ;
             1495          (xi) Section 59-12-1302 ;
             1496          (xii) Section 59-12-1402 ;
             1497          (xiii) Section 59-12-1503 ;
             1498          (xiv) Section 59-12-1703 ; [or]
             1499          (xv) Section 59-12-1802 [.];
             1500          (xvi) Section 59-12-1903 ;
             1501          (xvii) Section 59-12-2003 ; or
             1502          (xviii) Section 59-12-2103 .
             1503          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1504      the commission may make rules:
             1505          (i) providing for the circumstances under which a seller has exercised due diligence in
             1506      determining the nine-digit ZIP Code for an address; or
             1507          (ii) notwithstanding Subsection (7)(b), for determining the local taxing jurisdiction
             1508      within which a transaction is located if a seller is unable to determine the local taxing
             1509      jurisdiction within which the transaction is located under Subsection (7)(b).
             1510          (8) The location of a transaction made with a direct payment permit described in
             1511      Section 59-12-107.1 is the location where receipt of the tangible personal property, product, or
             1512      service by the purchaser occurs.
             1513          (9) The location of a purchase of direct mail is the location described in Subsection


             1514      (6), if the purchaser of the direct mail:
             1515          (a) has not been issued a direct payment permit under Section 59-12-107.1 ; and
             1516          (b) does not provide the seller the form or information described in Subsection
             1517      59-12-123 (1).
             1518          (10) (a) Except as provided in Subsection (10)(b), the location of a transaction
             1519      determined under Subsections (3) through (6), (8), or (9), is the local taxing jurisdiction within
             1520      which:
             1521          (i) the nine-digit ZIP Code assigned to the location determined under Subsections (3)
             1522      through (6), (8), or (9) is located; or
             1523          (ii) the five-digit ZIP Code assigned to the location determined under Subsections (3)
             1524      through (6), (8), or (9) is located if:
             1525          (A) a nine-digit ZIP Code is not available for the location determined under
             1526      Subsections (3) through (6), (8), or (9); or
             1527          (B) after exercising due diligence, a seller or certified service provider is unable to
             1528      determine a nine-digit ZIP Code for the location determined under Subsections (3) through
             1529      (6), (8), or (9).
             1530          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1531      the commission may make rules for determining the local taxing jurisdiction within which a
             1532      transaction is located if a seller or certified service provider is unable to determine the local
             1533      taxing jurisdiction within which the transaction is located under Subsection (10)(a).
             1534          (11) (a) As used in this Subsection (11), "florist delivery transaction" means a
             1535      transaction commenced by a florist that transmits an order:
             1536          (i) by:
             1537          (A) telegraph;
             1538          (B) telephone; or
             1539          (C) a means of communication similar to Subsection (11)(a)(i)(A) or (B); and
             1540          (ii) for delivery to another place:
             1541          (A) in this state; or


             1542          (B) outside this state.
             1543          (b) Notwithstanding Subsections (3) through (6), beginning on January 1, 2009, and
             1544      ending on December 31, 2009, the location of a florist delivery transaction is the business
             1545      location of the florist that commences the florist delivery transaction.
             1546          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1547      commission may by rule:
             1548          (i) define:
             1549          (A) "business location"; and
             1550          (B) "florist";
             1551          (ii) define what constitutes a means of communication similar to Subsection
             1552      (11)(a)(i)(A) or (B); and
             1553          (iii) provide procedures for determining when a transaction is commenced.
             1554          (12) (a) A tax collected under this chapter shall be reported to the commission on a
             1555      form that identifies the location of each transaction that occurs during the return filing period.
             1556          (b) The form described in Subsection (12)(a) shall be filed with the commission as
             1557      required under this chapter.
             1558          (13) This section does not apply to:
             1559          (a) amounts charged by a seller for:
             1560          (i) telecommunications service except for a prepaid calling service or a prepaid
             1561      wireless calling service as provided in Subsection (6)(b) or Section 59-12-215 ; or
             1562          (ii) the retail sale or transfer of:
             1563          (A) a motor vehicle other than a motor vehicle that is transportation equipment;
             1564          (B) an aircraft other than an aircraft that is transportation equipment;
             1565          (C) a watercraft;
             1566          (D) a modular home;
             1567          (E) a manufactured home; or
             1568          (F) a mobile home; or
             1569          (iii) except as provided in Section 59-12-214 , the lease or rental of tangible personal


             1570      property other than tangible personal property that is transportation equipment;
             1571          (b) a tax paid under this chapter:
             1572          (i) by a seller; and
             1573          (ii) for the seller's purchases; or
             1574          (c) a retail sale of tangible personal property or a product transferred electronically if:
             1575          (i) the seller receives the order for the tangible personal property or product transferred
             1576      electronically in this state;
             1577          (ii) receipt of the tangible personal property or product transferred electronically by the
             1578      purchaser or the purchaser's donee occurs in this state;
             1579          (iii) the location where receipt of the tangible personal property or product transferred
             1580      electronically by the purchaser occurs is determined in accordance with Subsections (3)
             1581      through (5); and
             1582          (iv) at the time the seller receives the order, the record keeping system that the seller
             1583      uses to calculate the proper amount of tax imposed under this chapter captures the location
             1584      where the order is received.
             1585          Section 3. Effective date.
             1586          This bill takes effect on July 1, 2010.


[Bill Documents][Bills Directory]