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S.B. 61 Enrolled

             1     

SALES AND USE TAX EXEMPTION FOR A

             2     
WEB SEARCH PORTAL

             3     
2010 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Howard A. Stephenson

             6     
House Sponsor: John Dougall

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill amends the Sales and Use Tax Act to provide a sales and use tax exemption.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides a sales and use tax exemption for certain purchases or leases for use in the
             14      operation of a web search portal; and
             15          .    makes technical and conforming changes.
             16      Monies Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          This bill takes effect on July 1, 2010.
             20      Utah Code Sections Affected:
             21      AMENDS:
             22          59-12-104, as last amended by Laws of Utah 2009, Chapters 31, 203, 212, and 385
             23     
             24      Be it enacted by the Legislature of the state of Utah:
             25          Section 1. Section 59-12-104 is amended to read:
             26           59-12-104. Exemptions.
             27          The following sales and uses are exempt from the taxes imposed by this chapter:
             28          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             29      under Chapter 13, Motor and Special Fuel Tax Act;


             30          (2) sales to the state, its institutions, and its political subdivisions; however, this
             31      exemption does not apply to sales of:
             32          (a) construction materials except:
             33          (i) construction materials purchased by or on behalf of institutions of the public
             34      education system as defined in Utah Constitution Article X, Section 2, provided the
             35      construction materials are clearly identified and segregated and installed or converted to real
             36      property which is owned by institutions of the public education system; and
             37          (ii) construction materials purchased by the state, its institutions, or its political
             38      subdivisions which are installed or converted to real property by employees of the state, its
             39      institutions, or its political subdivisions; or
             40          (b) tangible personal property in connection with the construction, operation,
             41      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             42      providing additional project capacity, as defined in Section 11-13-103 ;
             43          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             44          (i) the proceeds of each sale do not exceed $1; and
             45          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             46      the cost of the item described in Subsection (3)(b) as goods consumed; and
             47          (b) Subsection (3)(a) applies to:
             48          (i) food and food ingredients; or
             49          (ii) prepared food;
             50          (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
             51          (i) alcoholic beverages;
             52          (ii) food and food ingredients; or
             53          (iii) prepared food;
             54          (b) sales of tangible personal property or a product transferred electronically:
             55          (i) to a passenger;
             56          (ii) by a commercial airline carrier; and
             57          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or


             58          (c) services related to Subsection (4)(a) or (b);
             59          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
             60      and equipment:
             61          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
             62      North American Industry Classification System of the federal Executive Office of the
             63      President, Office of Management and Budget; and
             64          (II) for:
             65          (Aa) installation in an aircraft, including services relating to the installation of parts or
             66      equipment in the aircraft;
             67          (Bb) renovation of an aircraft; or
             68          (Cc) repair of an aircraft; or
             69          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
             70      commerce; or
             71          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
             72      aircraft operated by a common carrier in interstate or foreign commerce; and
             73          (b) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             74      a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
             75      refund:
             76          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
             77          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
             78          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
             79      the sale prior to filing for the refund;
             80          (iv) for sales and use taxes paid under this chapter on the sale;
             81          (v) in accordance with Section 59-1-1410 ; and
             82          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 ,
             83      if the person files for the refund on or before September 30, 2011;
             84          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             85      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture


             86      exhibitor, distributor, or commercial television or radio broadcaster;
             87          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             88      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             89      washing of tangible personal property;
             90          (b) if a seller that sells at the same business location assisted cleaning or washing of
             91      tangible personal property and cleaning or washing of tangible personal property that is not
             92      assisted cleaning or washing of tangible personal property, the exemption described in
             93      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             94      or washing of the tangible personal property; and
             95          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
             96      Utah Administrative Rulemaking Act, the commission may make rules:
             97          (i) governing the circumstances under which sales are at the same business location;
             98      and
             99          (ii) establishing the procedures and requirements for a seller to separately account for
             100      sales of assisted cleaning or washing of tangible personal property;
             101          (8) sales made to or by religious or charitable institutions in the conduct of their
             102      regular religious or charitable functions and activities, if the requirements of Section
             103      59-12-104.1 are fulfilled;
             104          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws
             105      of this state if the vehicle is:
             106          (a) not registered in this state; and
             107          (b) (i) not used in this state; or
             108          (ii) used in this state:
             109          (A) if the vehicle is not used to conduct business, for a time period that does not
             110      exceed the longer of:
             111          (I) 30 days in any calendar year; or
             112          (II) the time period necessary to transport the vehicle to the borders of this state; or
             113          (B) if the vehicle is used to conduct business, for the time period necessary to


             114      transport the vehicle to the borders of this state;
             115          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             116          (i) the item is intended for human use; and
             117          (ii) (A) a prescription was issued for the item; or
             118          (B) the item was purchased by a hospital or other medical facility; and
             119          (b) (i) Subsection (10)(a) applies to:
             120          (A) a drug;
             121          (B) a syringe; or
             122          (C) a stoma supply; and
             123          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             124      the commission may by rule define the terms:
             125          (A) "syringe"; or
             126          (B) "stoma supply";
             127          (11) sales or use of property, materials, or services used in the construction of or
             128      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             129          (12) (a) sales of an item described in Subsection (12)(c) served by:
             130          (i) the following if the item described in Subsection (12)(c) is not available to the
             131      general public:
             132          (A) a church; or
             133          (B) a charitable institution;
             134          (ii) an institution of higher education if:
             135          (A) the item described in Subsection (12)(c) is not available to the general public; or
             136          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             137      offered by the institution of higher education; or
             138          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             139          (i) a medical facility; or
             140          (ii) a nursing facility; and
             141          (c) Subsections (12)(a) and (b) apply to:


             142          (i) food and food ingredients;
             143          (ii) prepared food; or
             144          (iii) alcoholic beverages;
             145          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal
             146      property or a product transferred electronically by a person:
             147          (i) regardless of the number of transactions involving the sale of that tangible personal
             148      property or product transferred electronically by that person; and
             149          (ii) not regularly engaged in the business of selling that type of tangible personal
             150      property or product transferred electronically;
             151          (b) this Subsection (13) does not apply if:
             152          (i) the sale is one of a series of sales of a character to indicate that the person is
             153      regularly engaged in the business of selling that type of tangible personal property or product
             154      transferred electronically;
             155          (ii) the person holds that person out as regularly engaged in the business of selling that
             156      type of tangible personal property or product transferred electronically;
             157          (iii) the person sells an item of tangible personal property or product transferred
             158      electronically that the person purchased as a sale that is exempt under Subsection (25); or
             159          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             160      this state in which case the tax is based upon:
             161          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             162      sold; or
             163          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             164      value of the vehicle or vessel being sold at the time of the sale as determined by the
             165      commission; and
             166          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             167      commission shall make rules establishing the circumstances under which:
             168          (i) a person is regularly engaged in the business of selling a type of tangible personal
             169      property or product transferred electronically;


             170          (ii) a sale of tangible personal property or a product transferred electronically is one of
             171      a series of sales of a character to indicate that a person is regularly engaged in the business of
             172      selling that type of tangible personal property or product transferred electronically; or
             173          (iii) a person holds that person out as regularly engaged in the business of selling a
             174      type of tangible personal property or product transferred electronically;
             175          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             176      July 1, 2006, for a purchase or lease by a manufacturing facility except for a cogeneration
             177      facility, [for] of the following:
             178          (i) machinery and equipment that:
             179          (A) are used:
             180          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             181      recycler described in Subsection 59-12-102 (52)(b):
             182          (Aa) in the manufacturing process;
             183          (Bb) to manufacture an item sold as tangible personal property; and
             184          (Cc) beginning on July 1, 2009, in a manufacturing facility described in this
             185      Subsection (14)(a)(i)(A)(I) in the state; or
             186          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             187      59-12-102 (52)(b):
             188          (Aa) to process an item sold as tangible personal property; and
             189          (Bb) beginning on July 1, 2009, in a manufacturing facility described in this
             190      Subsection (14)(a)(i)(A)(II) in the state; and
             191          (B) have an economic life of three or more years; and
             192          (ii) normal operating repair or replacement parts that:
             193          (A) have an economic life of three or more years; and
             194          (B) are used:
             195          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             196      recycler described in Subsection 59-12-102 (52)(b):
             197          (Aa) in the manufacturing process; and


             198          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(I) in the
             199      state; or
             200          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             201      59-12-102 (52)(b):
             202          (Aa) to process an item sold as tangible personal property; and
             203          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(II) in the
             204      state;
             205          (b) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             206      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             207      [for] of the following:
             208          (i) machinery and equipment that:
             209          (A) are used:
             210          (I) in the manufacturing process;
             211          (II) to manufacture an item sold as tangible personal property; and
             212          (III) beginning on July 1, 2009, in a manufacturing facility described in this
             213      Subsection (14)(b) in the state; and
             214          (B) have an economic life of three or more years; and
             215          (ii) normal operating repair or replacement parts that:
             216          (A) are used:
             217          (I) in the manufacturing process; and
             218          (II) in a manufacturing facility described in this Subsection (14)(b) in the state; and
             219          (B) have an economic life of three or more years;
             220          (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
             221      by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
             222      NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
             223      Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
             224      of the 2002 North American Industry Classification System of the federal Executive Office of
             225      the President, Office of Management and Budget, of the following:


             226          (i) machinery and equipment that:
             227          (A) are used:
             228          (I) (Aa) in the production process, other than the production of real property; or
             229          (Bb) in research and development; and
             230          (II) beginning on July 1, 2009, in an establishment described in this Subsection (14)(c)
             231      in the state; and
             232          (B) have an economic life of three or more years; and
             233          (ii) normal operating repair or replacement parts that:
             234          (A) have an economic life of three or more years; and
             235          (B) are used in:
             236          (I) (Aa) the production process, except for the production of real property; and
             237          (Bb) an establishment described in this Subsection (14)(c) in the state; or
             238          (II) (Aa) research and development; and
             239          (Bb) in an establishment described in this Subsection (14)(c) in the state;
             240          (d) (i) amounts paid or charged for a purchase or lease made on or after July 1, 2010,
             241      but on or before June 30, 2014, by an establishment described in NAICS Code 518112, Web
             242      Search Portals, of the 2002 North American Industry Classification System of the federal
             243      Executive Office of the President, Office of Management and Budget, of the following:
             244          (A) machinery and equipment that:
             245          (I) are used in the operation of the web search portal;
             246          (II) have an economic life of three or more years; and
             247          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             248      in the state; and
             249          (B) normal operating repair or replacement parts that:
             250          (I) are used in the operation of the web search portal;
             251          (II) have an economic life of three or more years; and
             252          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             253      in the state; or


             254          (ii) amounts paid or charged for a purchase or lease made on or after July 1, 2014, by
             255      an establishment described in NAICS Code 518112, Web Search Portals, of the 2002 North
             256      American Industry Classification System of the federal Executive Office of the President,
             257      Office of Management and Budget, of the following:
             258          (A) machinery and equipment that:
             259          (I) are used in the operation of the web search portal; and
             260          (II) have an economic life of three or more years; and
             261          (B) normal operating repair or replacement parts that:
             262          (I) are used in the operation of the web search portal; and
             263          (II) have an economic life of three or more years;
             264          [(d)] (e) for purposes of this Subsection (14) and in accordance with Title 63G,
             265      Chapter 3, Utah Administrative Rulemaking Act, the commission:
             266          (i) shall by rule define the term "establishment"; and
             267          (ii) may by rule define what constitutes:
             268          (A) processing an item sold as tangible personal property;
             269          (B) the production process, except for the production of real property; [or]
             270          (C) research and development; [and] or
             271          (D) a new or expanding establishment described in Subsection (14)(d) in the state; and
             272          [(e)] (f) on or before October 1, 2011, and every five years after October 1, 2011, the
             273      commission shall:
             274          (i) review the exemptions described in this Subsection (14) and make
             275      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             276      exemptions should be continued, modified, or repealed; and
             277          (ii) include in its report:
             278          (A) an estimate of the cost of the exemptions;
             279          (B) the purpose and effectiveness of the exemptions; and
             280          (C) the benefits of the exemptions to the state;
             281          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:


             282          (i) tooling;
             283          (ii) special tooling;
             284          (iii) support equipment;
             285          (iv) special test equipment; or
             286          (v) parts used in the repairs or renovations of tooling or equipment described in
             287      Subsections (15)(a)(i) through (iv); and
             288          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             289          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             290      performance of any aerospace or electronics industry contract with the United States
             291      government or any subcontract under that contract; and
             292          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             293      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             294      by:
             295          (A) a government identification tag placed on the tooling, equipment, or parts; or
             296          (B) listing on a government-approved property record if placing a government
             297      identification tag on the tooling, equipment, or parts is impractical;
             298          (16) sales of newspapers or newspaper subscriptions;
             299          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
             300      product transferred electronically traded in as full or part payment of the purchase price,
             301      except that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle
             302      dealer, trade-ins are limited to other vehicles only, and the tax is based upon:
             303          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             304      vehicle being traded in; or
             305          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             306      fair market value of the vehicle being sold and the vehicle being traded in, as determined by
             307      the commission; and
             308          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             309      following items of tangible personal property or products transferred electronically traded in as


             310      full or part payment of the purchase price:
             311          (i) money;
             312          (ii) electricity;
             313          (iii) water;
             314          (iv) gas; or
             315          (v) steam;
             316          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal
             317      property or a product transferred electronically used or consumed primarily and directly in
             318      farming operations, regardless of whether the tangible personal property or product transferred
             319      electronically:
             320          (A) becomes part of real estate; or
             321          (B) is installed by a:
             322          (I) farmer;
             323          (II) contractor; or
             324          (III) subcontractor; or
             325          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
             326      product transferred electronically if the tangible personal property or product transferred
             327      electronically is exempt under Subsection (18)(a)(i); and
             328          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following are
             329      subject to the taxes imposed by this chapter:
             330          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
             331      incidental to farming:
             332          (I) machinery;
             333          (II) equipment;
             334          (III) materials; or
             335          (IV) supplies; and
             336          (B) tangible personal property that is considered to be used in a manner that is
             337      incidental to farming includes:


             338          (I) hand tools; or
             339          (II) maintenance and janitorial equipment and supplies;
             340          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
             341      transferred electronically if the tangible personal property or product transferred electronically
             342      is used in an activity other than farming; and
             343          (B) tangible personal property or a product transferred electronically that is considered
             344      to be used in an activity other than farming includes:
             345          (I) office equipment and supplies; or
             346          (II) equipment and supplies used in:
             347          (Aa) the sale or distribution of farm products;
             348          (Bb) research; or
             349          (Cc) transportation; or
             350          (iii) a vehicle required to be registered by the laws of this state during the period
             351      ending two years after the date of the vehicle's purchase;
             352          (19) sales of hay;
             353          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             354      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             355      garden, farm, or other agricultural produce is sold by:
             356          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             357      agricultural produce;
             358          (b) an employee of the producer described in Subsection (20)(a); or
             359          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             360          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             361      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             362          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             363      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             364      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             365      manufacturer, processor, wholesaler, or retailer;


             366          (23) a product stored in the state for resale;
             367          (24) (a) purchases of a product if:
             368          (i) the product is:
             369          (A) purchased outside of this state;
             370          (B) brought into this state:
             371          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             372          (II) by a nonresident person who is not living or working in this state at the time of the
             373      purchase;
             374          (C) used for the personal use or enjoyment of the nonresident person described in
             375      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             376          (D) not used in conducting business in this state; and
             377          (ii) for:
             378          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
             379      the product for a purpose for which the product is designed occurs outside of this state;
             380          (B) a boat, the boat is registered outside of this state; or
             381          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             382      outside of this state;
             383          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             384          (i) a lease or rental of a product; or
             385          (ii) a sale of a vehicle exempt under Subsection (33); and
             386          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             387      purposes of Subsection (24)(a), the commission may by rule define what constitutes the
             388      following:
             389          (i) conducting business in this state if that phrase has the same meaning in this
             390      Subsection (24) as in Subsection (63);
             391          (ii) the first use of a product if that phrase has the same meaning in this Subsection
             392      (24) as in Subsection (63); or
             393          (iii) a purpose for which a product is designed if that phrase has the same meaning in


             394      this Subsection (24) as in Subsection (63);
             395          (25) a product purchased for resale in this state, in the regular course of business,
             396      either in its original form or as an ingredient or component part of a manufactured or
             397      compounded product;
             398          (26) a product upon which a sales or use tax was paid to some other state, or one of its
             399      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             400      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             401      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             402      Act;
             403          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             404      person for use in compounding a service taxable under the subsections;
             405          (28) purchases made in accordance with the special supplemental nutrition program
             406      for women, infants, and children established in 42 U.S.C. Sec. 1786;
             407          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             408      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or
             409      ovens of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial
             410      Classification Manual of the federal Executive Office of the President, Office of Management
             411      and Budget;
             412          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             413      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
             414          (a) not registered in this state; and
             415          (b) (i) not used in this state; or
             416          (ii) used in this state:
             417          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
             418      time period that does not exceed the longer of:
             419          (I) 30 days in any calendar year; or
             420          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             421      the borders of this state; or


             422          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             423      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             424      state;
             425          (31) sales of aircraft manufactured in Utah;
             426          (32) amounts paid for the purchase of telecommunications service for purposes of
             427      providing telecommunications service;
             428          (33) sales, leases, or uses of the following:
             429          (a) a vehicle by an authorized carrier; or
             430          (b) tangible personal property that is installed on a vehicle:
             431          (i) sold or leased to or used by an authorized carrier; and
             432          (ii) before the vehicle is placed in service for the first time;
             433          (34) (a) 45% of the sales price of any new manufactured home; and
             434          (b) 100% of the sales price of any used manufactured home;
             435          (35) sales relating to schools and fundraising sales;
             436          (36) sales or rentals of durable medical equipment if:
             437          (a) a person presents a prescription for the durable medical equipment; and
             438          (b) the durable medical equipment is used for home use only;
             439          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             440      Section 72-11-102 ; and
             441          (b) the commission shall by rule determine the method for calculating sales exempt
             442      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             443          (38) sales to a ski resort of:
             444          (a) snowmaking equipment;
             445          (b) ski slope grooming equipment;
             446          (c) passenger ropeways as defined in Section 72-11-102 ; or
             447          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             448      described in Subsections (38)(a) through (c);
             449          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial


             450      use;
             451          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             452      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             453      59-12-102 ;
             454          (b) if a seller that sells or rents at the same business location the right to use or operate
             455      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             456      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             457      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             458      amusement, entertainment, or recreation for the assisted amusement devices; and
             459          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
             460      Utah Administrative Rulemaking Act, the commission may make rules:
             461          (i) governing the circumstances under which sales are at the same business location;
             462      and
             463          (ii) establishing the procedures and requirements for a seller to separately account for
             464      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation
             465      for assisted amusement devices;
             466          (41) (a) sales of photocopies by:
             467          (i) a governmental entity; or
             468          (ii) an entity within the state system of public education, including:
             469          (A) a school; or
             470          (B) the State Board of Education; or
             471          (b) sales of publications by a governmental entity;
             472          (42) amounts paid for admission to an athletic event at an institution of higher
             473      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             474      20 U.S.C. Sec. 1681 et seq.;
             475          (43) (a) sales made to or by:
             476          (i) an area agency on aging; or
             477          (ii) a senior citizen center owned by a county, city, or town; or


             478          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             479          (44) sales or leases of semiconductor fabricating, processing, research, or development
             480      materials regardless of whether the semiconductor fabricating, processing, research, or
             481      development materials:
             482          (a) actually come into contact with a semiconductor; or
             483          (b) ultimately become incorporated into real property;
             484          (45) an amount paid by or charged to a purchaser for accommodations and services
             485      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             486      59-12-104.2 ;
             487          (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             488      sports event registration certificate in accordance with Section 41-3-306 for the event period
             489      specified on the temporary sports event registration certificate;
             490          (47) sales or uses of electricity, if the sales or uses are:
             491          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             492      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             493      source, as designated in the tariff by the Public Service Commission of Utah; and
             494          (b) for an amount of electricity that is:
             495          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             496      under the tariff described in Subsection (47)(a); and
             497          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             498      Subsection (47)(a) that may be purchased under the tariff described in Subsection (47)(a);
             499          (48) sales or rentals of mobility enhancing equipment if a person presents a
             500      prescription for the mobility enhancing equipment;
             501          (49) sales of water in a:
             502          (a) pipe;
             503          (b) conduit;
             504          (c) ditch; or
             505          (d) reservoir;


             506          (50) sales of currency or coinage that constitute legal tender of the United States or of
             507      a foreign nation;
             508          (51) (a) sales of an item described in Subsection (51)(b) if the item:
             509          (i) does not constitute legal tender of any nation; and
             510          (ii) has a gold, silver, or platinum content of 80% or more; and
             511          (b) Subsection (51)(a) applies to a gold, silver, or platinum:
             512          (i) ingot;
             513          (ii) bar;
             514          (iii) medallion; or
             515          (iv) decorative coin;
             516          (52) amounts paid on a sale-leaseback transaction;
             517          (53) sales of a prosthetic device:
             518          (a) for use on or in a human; and
             519          (b) (i) for which a prescription is required; or
             520          (ii) if the prosthetic device is purchased by a hospital or other medical facility;
             521          (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
             522      machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
             523      or equipment is primarily used in the production or postproduction of the following media for
             524      commercial distribution:
             525          (i) a motion picture;
             526          (ii) a television program;
             527          (iii) a movie made for television;
             528          (iv) a music video;
             529          (v) a commercial;
             530          (vi) a documentary; or
             531          (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
             532      commission by administrative rule made in accordance with Subsection (54)(d); or
             533          (b) notwithstanding Subsection (54)(a), purchases, leases, or rentals of machinery or


             534      equipment by an establishment described in Subsection (54)(c) that is used for the production
             535      or postproduction of the following are subject to the taxes imposed by this chapter:
             536          (i) a live musical performance;
             537          (ii) a live news program; or
             538          (iii) a live sporting event;
             539          (c) the following establishments listed in the 1997 North American Industry
             540      Classification System of the federal Executive Office of the President, Office of Management
             541      and Budget, apply to Subsections (54)(a) and (b):
             542          (i) NAICS Code 512110; or
             543          (ii) NAICS Code 51219; and
             544          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             545      the commission may by rule:
             546          (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
             547      or
             548          (ii) define:
             549          (A) "commercial distribution";
             550          (B) "live musical performance";
             551          (C) "live news program"; or
             552          (D) "live sporting event";
             553          (55) (a) leases of seven or more years or purchases made on or after July 1, 2004 but
             554      on or before June 30, 2019, of machinery or equipment that:
             555          (i) is leased or purchased for or by a facility that:
             556          (A) is a renewable energy production facility;
             557          (B) is located in the state; and
             558          (C) (I) becomes operational on or after July 1, 2004; or
             559          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             560      2004 as a result of the use of the machinery or equipment;
             561          (ii) has an economic life of five or more years; and


             562          (iii) is used to make the facility or the increase in capacity of the facility described in
             563      Subsection (55)(a)(i) operational up to the point of interconnection with an existing
             564      transmission grid including:
             565          (A) a wind turbine;
             566          (B) generating equipment;
             567          (C) a control and monitoring system;
             568          (D) a power line;
             569          (E) substation equipment;
             570          (F) lighting;
             571          (G) fencing;
             572          (H) pipes; or
             573          (I) other equipment used for locating a power line or pole; and
             574          (b) this Subsection (55) does not apply to:
             575          (i) machinery or equipment used in construction of:
             576          (A) a new renewable energy production facility; or
             577          (B) the increase in the capacity of a renewable energy production facility;
             578          (ii) contracted services required for construction and routine maintenance activities;
             579      and
             580          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             581      of the facility described in Subsection (55)(a)(i)(C)(II), machinery or equipment used or
             582      acquired after:
             583          (A) the renewable energy production facility described in Subsection (55)(a)(i) is
             584      operational as described in Subsection (55)(a)(iii); or
             585          (B) the increased capacity described in Subsection (55)(a)(i) is operational as
             586      described in Subsection (55)(a)(iii);
             587          (56) (a) leases of seven or more years or purchases made on or after July 1, 2004 but
             588      on or before June 30, 2019, of machinery or equipment that:
             589          (i) is leased or purchased for or by a facility that:


             590          (A) is a waste energy production facility;
             591          (B) is located in the state; and
             592          (C) (I) becomes operational on or after July 1, 2004; or
             593          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             594      2004 as a result of the use of the machinery or equipment;
             595          (ii) has an economic life of five or more years; and
             596          (iii) is used to make the facility or the increase in capacity of the facility described in
             597      Subsection (56)(a)(i) operational up to the point of interconnection with an existing
             598      transmission grid including:
             599          (A) generating equipment;
             600          (B) a control and monitoring system;
             601          (C) a power line;
             602          (D) substation equipment;
             603          (E) lighting;
             604          (F) fencing;
             605          (G) pipes; or
             606          (H) other equipment used for locating a power line or pole; and
             607          (b) this Subsection (56) does not apply to:
             608          (i) machinery or equipment used in construction of:
             609          (A) a new waste energy facility; or
             610          (B) the increase in the capacity of a waste energy facility;
             611          (ii) contracted services required for construction and routine maintenance activities;
             612      and
             613          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             614      described in Subsection (56)(a)(i)(C)(II), machinery or equipment used or acquired after:
             615          (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
             616      described in Subsection (56)(a)(iii); or
             617          (B) the increased capacity described in Subsection (56)(a)(i) is operational as


             618      described in Subsection (56)(a)(iii);
             619          (57) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             620      or before June 30, 2019, of machinery or equipment that:
             621          (i) is leased or purchased for or by a facility that:
             622          (A) is located in the state;
             623          (B) produces fuel from biomass energy including:
             624          (I) methanol; or
             625          (II) ethanol; and
             626          (C) (I) becomes operational on or after July 1, 2004; or
             627          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004
             628      as a result of the installation of the machinery or equipment;
             629          (ii) has an economic life of five or more years; and
             630          (iii) is installed on the facility described in Subsection (57)(a)(i);
             631          (b) this Subsection (57) does not apply to:
             632          (i) machinery or equipment used in construction of:
             633          (A) a new facility described in Subsection (57)(a)(i); or
             634          (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
             635          (ii) contracted services required for construction and routine maintenance activities;
             636      and
             637          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             638      described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or acquired after:
             639          (A) the facility described in Subsection (57)(a)(i) is operational; or
             640          (B) the increased capacity described in Subsection (57)(a)(i) is operational;
             641          (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
             642      product transferred electronically to a person within this state if that tangible personal property
             643      or product transferred electronically is subsequently shipped outside the state and incorporated
             644      pursuant to contract into and becomes a part of real property located outside of this state;
             645          (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other


             646      state or political entity to which the tangible personal property is shipped imposes a sales, use,
             647      gross receipts, or other similar transaction excise tax on the transaction against which the other
             648      state or political entity allows a credit for sales and use taxes imposed by this chapter; and
             649          (c) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             650      a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
             651      refund:
             652          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
             653          (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
             654      which the sale is made;
             655          (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
             656      sale prior to filing for the refund;
             657          (iv) for sales and use taxes paid under this chapter on the sale;
             658          (v) in accordance with Section 59-1-1410 ; and
             659          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 ,
             660      if the person files for the refund on or before June 30, 2011;
             661          (59) purchases:
             662          (a) of one or more of the following items in printed or electronic format:
             663          (i) a list containing information that includes one or more:
             664          (A) names; or
             665          (B) addresses; or
             666          (ii) a database containing information that includes one or more:
             667          (A) names; or
             668          (B) addresses; and
             669          (b) used to send direct mail;
             670          (60) redemptions or repurchases of a product by a person if that product was:
             671          (a) delivered to a pawnbroker as part of a pawn transaction; and
             672          (b) redeemed or repurchased within the time period established in a written agreement
             673      between the person and the pawnbroker for redeeming or repurchasing the product;


             674          (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
             675          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
             676      and
             677          (ii) has a useful economic life of one or more years; and
             678          (b) the following apply to Subsection (61)(a):
             679          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             680          (ii) telecommunications equipment, machinery, or software required for 911 service;
             681          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             682          (iv) telecommunications switching or routing equipment, machinery, or software; or
             683          (v) telecommunications transmission equipment, machinery, or software;
             684          (62) (a) beginning on July 1, 2006, and ending on June 30, 2016, purchases of
             685      tangible personal property or a product transferred electronically that are used in the research
             686      and development of coal-to-liquids, oil shale, or tar sands technology; and
             687          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             688      the commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
             689      purchases of tangible personal property or a product transferred electronically that are used in
             690      the research and development of coal-to-liquids, oil shale, and tar sands technology;
             691          (63) (a) purchases of tangible personal property or a product transferred electronically
             692      if:
             693          (i) the tangible personal property or product transferred electronically is:
             694          (A) purchased outside of this state;
             695          (B) brought into this state at any time after the purchase described in Subsection
             696      (63)(a)(i)(A); and
             697          (C) used in conducting business in this state; and
             698          (ii) for:
             699          (A) tangible personal property or a product transferred electronically other than the
             700      tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
             701      for a purpose for which the property is designed occurs outside of this state; or


             702          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             703      outside of this state;
             704          (b) the exemption provided for in Subsection (63)(a) does not apply to:
             705          (i) a lease or rental of tangible personal property or a product transferred
             706      electronically; or
             707          (ii) a sale of a vehicle exempt under Subsection (33); and
             708          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             709      purposes of Subsection (63)(a), the commission may by rule define what constitutes the
             710      following:
             711          (i) conducting business in this state if that phrase has the same meaning in this
             712      Subsection (63) as in Subsection (24);
             713          (ii) the first use of tangible personal property or a product transferred electronically if
             714      that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
             715          (iii) a purpose for which tangible personal property or a product transferred
             716      electronically is designed if that phrase has the same meaning in this Subsection (63) as in
             717      Subsection (24);
             718          (64) sales of disposable home medical equipment or supplies if:
             719          (a) a person presents a prescription for the disposable home medical equipment or
             720      supplies;
             721          (b) the disposable home medical equipment or supplies are used exclusively by the
             722      person to whom the prescription described in Subsection (64)(a) is issued; and
             723          (c) the disposable home medical equipment and supplies are listed as eligible for
             724      payment under:
             725          (i) Title XVIII, federal Social Security Act; or
             726          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             727          (65) sales:
             728          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
             729      District Act; or


             730          (b) of tangible personal property to a subcontractor of a public transit district, if the
             731      tangible personal property is:
             732          (i) clearly identified; and
             733          (ii) installed or converted to real property owned by the public transit district;
             734          (66) sales of construction materials:
             735          (a) purchased on or after July 1, 2010;
             736          (b) purchased by, on behalf of, or for the benefit of an international airport:
             737          (i) located within a county of the first class; and
             738          (ii) that has a United States customs office on its premises; and
             739          (c) if the construction materials are:
             740          (i) clearly identified;
             741          (ii) segregated; and
             742          (iii) installed or converted to real property:
             743          (A) owned or operated by the international airport described in Subsection (66)(b);
             744      and
             745          (B) located at the international airport described in Subsection (66)(b);
             746          (67) sales of construction materials:
             747          (a) purchased on or after July 1, 2008;
             748          (b) purchased by, on behalf of, or for the benefit of a new airport:
             749          (i) located within a county of the second class; and
             750          (ii) that is owned or operated by a city in which an airline as defined in Section
             751      59-2-102 is headquartered; and
             752          (c) if the construction materials are:
             753          (i) clearly identified;
             754          (ii) segregated; and
             755          (iii) installed or converted to real property:
             756          (A) owned or operated by the new airport described in Subsection (67)(b);
             757          (B) located at the new airport described in Subsection (67)(b); and


             758          (C) as part of the construction of the new airport described in Subsection (67)(b); and
             759          (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine.
             760          Section 2. Effective date.
             761          This bill takes effect on July 1, 2010.


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