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S.B. 76 Enrolled

             1     

DISTRIBUTION OF REVENUES COLLECTED UNDER THE

             2     
LOCAL SALES AND USE TAX ACT

             3     
2011 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: David P. Hinkins

             6     
House Sponsor: Christine F. Watkins

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill amends the Local Sales and Use Tax Act to address the distribution of
             11      revenues.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies the distribution of revenues under the Local Sales and Use Tax Act; and
             15          .    makes technical and conforming changes.
             16      Money Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          This bill takes effect on July 1, 2011.
             20      Utah Code Sections Affected:
             21      AMENDS:
             22          59-12-204, as last amended by Laws of Utah 2009, Chapters 203 and 385
             23          59-12-205, as last amended by Laws of Utah 2009, Chapters 92 and 203
             24          59-12-2103, as enacted by Laws of Utah 2008, Chapter 323
             25     
             26      Be it enacted by the Legislature of the state of Utah:
             27          Section 1. Section 59-12-204 is amended to read:
             28           59-12-204. Sales and use tax ordinance provisions -- Tax rate -- Distribution of
             29      tax revenues -- Commission requirement to retain an amount to be deposited into the


             30      Qualified Emergency Food Agencies Fund.
             31          (1) The tax ordinance adopted pursuant to this part shall impose a tax upon those
             32      transactions listed in Subsection 59-12-103 (1).
             33          (2) (a) The tax ordinance under Subsection (1) shall include a provision imposing a tax
             34      upon every transaction listed in Subsection 59-12-103 (1) made within a county, including areas
             35      contained within the cities and towns located in the county:
             36          (i) at the rate of 1% of the purchase price paid or charged; and
             37          (ii) if the location of the transaction is [consummated] within the county [in accordance
             38      with Section 59-12-205 ] as determined under Sections 59-12-211 through 59-12-215 .
             39          (b) Notwithstanding Subsection (2)(a), a tax ordinance under this Subsection (2) shall
             40      include a provision prohibiting a county, city, or town from imposing a tax under this section
             41      on the sales and uses described in Section 59-12-104 to the extent the sales and uses are
             42      exempt from taxation under Section 59-12-104 .
             43          (3) Such tax ordinance shall include provisions substantially the same as those
             44      contained in Part 1, Tax Collection, insofar as they relate to sales or use tax, except that the
             45      name of the county as the taxing agency shall be substituted for that of the state where
             46      necessary for the purpose of this part and that an additional license is not required if one has
             47      been or is issued under Section 59-12-106 .
             48          (4) Such tax ordinance shall include a provision that the county shall contract, prior to
             49      the effective date of the ordinance, with the commission to perform all functions incident to the
             50      administration or operation of the ordinance.
             51          (5) Such tax ordinance shall include a provision that the sale, storage, use, or other
             52      consumption of tangible personal property, the purchase price or the cost of which has been
             53      subject to sales or use tax under a sales and use tax ordinance enacted in accordance with this
             54      part by any county, city, or town in any other county in this state, shall be exempt from the tax
             55      due under this ordinance.
             56          (6) Such tax ordinance shall include a provision that any person subject to the
             57      provisions of a city or town sales and use tax shall be exempt from the county sales and use tax


             58      if the city or town sales and use tax is levied under an ordinance including provisions in
             59      substance as follows:
             60          (a) a provision imposing a tax upon every transaction listed in Subsection 59-12-103 (1)
             61      made within the city or town at the rate imposed by the county in which it is situated pursuant
             62      to Subsection (2);
             63          (b) notwithstanding Subsection (2)(a), a provision prohibiting the city or town from
             64      imposing a tax under this section on the sales and uses described in Section 59-12-104 to the
             65      extent the sales and uses are exempt from taxation under Section 59-12-104 ;
             66          (c) provisions substantially the same as those contained in Part 1, Tax Collection,
             67      insofar as they relate to sales and use taxes, except that the name of the city or town as the
             68      taxing agency shall be substituted for that of the state where necessary for the purposes of this
             69      part;
             70          (d) a provision that the city or town shall contract prior to the effective date of the city
             71      or town sales and use tax ordinance with the commission to perform all functions incident to
             72      the administration or operation of the sales and use tax ordinance of the city or town;
             73          (e) a provision that the sale, storage, use, or other consumption of tangible personal
             74      property, the gross receipts from the sale of or the cost of which has been subject to sales or use
             75      tax under a sales and use tax ordinance enacted in accordance with this part by any county
             76      other than the county in which the city or town is located, or city or town in this state, shall be
             77      exempt from the tax; and
             78          (f) a provision that the amount of any tax paid under Part 1, Tax Collection, shall not
             79      be included as a part of the purchase price paid or charged for a taxable item.
             80          (7) Notwithstanding any other provision of this section, beginning July 1, 2000, the
             81      commission shall:
             82          (a) determine and retain the portion of sales and use tax imposed under this section:
             83          (i) by each county and by each city and town within that county whose legislative body
             84      consents by resolution to the commission's retaining and depositing sales and use tax revenues
             85      as provided in this Subsection (7); and


             86          (ii) that is equal to the revenues generated by a 1/64% tax rate;
             87          (b) deposit the revenues described in Subsection (7)(a) into a special fund of the
             88      county, or a city, town, or other political subdivision of the state located within that county, that
             89      has issued bonds to finance sports or recreational facilities or that is leasing sports or
             90      recreational facilities, in order to repay those bonds or to pay the lease payments; and
             91          (c) continue to deposit those revenues into the special fund only as long as the bonds or
             92      leases are outstanding.
             93          (8) (a) Notwithstanding any other provision of this section, beginning on July 1, 2009,
             94      the commission shall calculate and retain a portion of the sales and use tax collected under this
             95      part as provided in this Subsection (8).
             96          (b) For a city, town, or unincorporated area of a county that imposes a tax under this
             97      part, the commission shall calculate a percentage each month by dividing the sales and use tax
             98      collected under this part for that month within the boundaries of that city, town, or
             99      unincorporated area of a county by the total sales and use tax collected under this part for that
             100      month within the boundaries of all of the cities, towns, and unincorporated areas of the
             101      counties that impose a tax under this part.
             102          (c) For a city, town, or unincorporated area of a county that imposes a tax under this
             103      part, the commission shall retain each month an amount equal to the product of:
             104          (i) the percentage the commission determines for the month under Subsection (8)(b)
             105      for the city, town, or unincorporated area of a county; and
             106          (ii) $25,417.
             107          (d) The commission shall deposit an amount the commission retains in accordance
             108      with this Subsection (8) into the Qualified Emergency Food Agencies Fund created by Section
             109      9-4-1409 .
             110          (e) An amount the commission deposits into the Qualified Emergency Food Agencies
             111      Fund shall be expended as provided in Section 9-4-1409 .
             112          Section 2. Section 59-12-205 is amended to read:
             113           59-12-205. Ordinances to conform with statutory amendments -- Distribution of


             114      tax revenues -- Determination of population.
             115          (1) [Each] A county, city, [and] or town, in order to maintain in effect sales and use tax
             116      ordinances adopted pursuant to Section 59-12-204 , shall, within 30 days of [any] an
             117      amendment [of any] to an applicable [provisions] provision of Part 1, Tax Collection, adopt
             118      amendments [of their respective] to the county's, city's, or town's sales and use tax ordinances
             119      as required to conform [with] to the amendments to Part 1, Tax Collection[, insofar as they
             120      relate to sales and use taxes].
             121          (2) Except as provided in Subsections (3) through (5) and subject to Subsection (6):
             122          (a) 50% of each dollar collected from the sales and use tax authorized by this part shall
             123      be [paid] distributed to each county, city, and town on the basis of the percentage that the
             124      population of the county, city, or town bears to the total population of all counties, cities, and
             125      towns in the state; and
             126          (b) (i) except as provided in Subsection (2)(b)(ii), 50% of each dollar collected from
             127      the sales and use tax authorized by this part shall be [paid] distributed to each county, city, and
             128      town on the basis of the location [where] of the transaction [is consummated] as determined
             129      under Sections 59-12-211 through 59-12-215 ; and
             130          (ii) 50% of each dollar collected from the sales and use tax authorized by this part
             131      within a project area described in a project area plan adopted by the military installation
             132      development authority under Title 63H, Chapter 1, Military Installation Development
             133      Authority Act, shall be [paid] distributed to the military installation development authority
             134      created in Section 63H-1-201 .
             135          (3) (a) Beginning on July 1, 2011, and ending on June 30, 2016, the commission shall
             136      each year distribute to a county, city, or town the distribution required by this Subsection (3) if:
             137          (i) the county, city, or town is a:
             138          (A) county of the third, fourth, fifth, or sixth class;
             139          (B) city of the fifth class; or
             140          (C) town;
             141          (ii) the county, city, or town received a distribution under this section for the calendar


             142      year beginning on January 1, 2008, that was less than the distribution under this section that the
             143      county, city, or town received for the calendar year beginning on January 1, 2007;
             144          (iii) (A) for a county described in Subsection (3)(a)(i)(A), the county had located
             145      within the unincorporated area of the county for one or more days during the calendar year
             146      beginning on January 1, 2008, an establishment described in NAICS Industry Group 2121,
             147      Coal Mining, or NAICS Code 213113, Support Activities for Coal Mining, of the 2002 North
             148      American Industry Classification System of the federal Executive Office of the President,
             149      Office of Management and Budget; or
             150          (B) for a city described in Subsection (3)(a)(i)(B) or a town described in Subsection
             151      (3)(a)(i)(C), the city or town had located within the city or town for one or more days during
             152      the calendar year beginning on January 1, 2008, an establishment described in NAICS Industry
             153      Group 2121, Coal Mining, or NAICS Code 213113, Support Activities for Coal Mining, of the
             154      2002 North American Industry Classification System of the federal Executive Office of the
             155      President, Office of Management and Budget; and
             156          (iv) (A) for a county described in Subsection (3)(a)(i)(A), at least one establishment
             157      described in Subsection (3)(a)(iii)(A) located within the unincorporated area of the county for
             158      one more days during the calendar year beginning on January 1, 2008, was not the holder of a
             159      direct payment permit under Section 59-12-107.1 ; or
             160          (B) for a city described in Subsection (3)(a)(i)(B) or a town described in Subsection
             161      (3)(a)(i)(C), at least one establishment described in Subsection (3)(a)(iii)(B) located within a
             162      city or town for one or more days during the calendar year beginning on January 1, 2008, was
             163      not the holder of a direct payment permit under Section 59-12-107.1 .
             164          (b) The commission shall make the distribution required by this Subsection (3) to a
             165      county, city, or town described in Subsection (3)(a):
             166          (i) from the distribution required by Subsection (2)(a); and
             167          (ii) before making any other distribution required by this section.
             168          (c) (i) For purposes of this Subsection (3), the distribution is the amount calculated by
             169      multiplying the fraction calculated under Subsection (3)(c)(ii) by $333,583.


             170          (ii) For purposes of Subsection (3)(c)(i):
             171          (A) the numerator of the fraction is the difference calculated by subtracting the
             172      distribution a county, city, or town described in Subsection (3)(a) received under this section
             173      for the calendar year beginning on January 1, 2008, from the distribution under this section that
             174      the county, city, or town received for the calendar year beginning on January 1, 2007; and
             175          (B) the denominator of the fraction is $333,583.
             176          (d) A distribution required by this Subsection (3) is in addition to any other distribution
             177      required by this section.
             178          [(3)] (4) (a) For fiscal years beginning with fiscal year 1983-84 and ending with fiscal
             179      year 2005-06, a county, city, or town may not receive a tax revenue distribution less than .75%
             180      of the taxable sales within the boundaries of the county, city, or town.
             181          (b) The commission shall proportionally reduce monthly distributions to any county,
             182      city, or town that, but for the reduction, would receive a distribution in excess of 1% of the
             183      sales and use tax revenue collected within the boundaries of the county, city, or town.
             184          [(4)] (5) (a) As used in this Subsection [(4)] (5):
             185          (i) "Eligible county, city, or town" means a county, city, or town that receives $2,000 or
             186      more in tax revenue distributions in accordance with Subsection [(3)] (4) for each of the
             187      following fiscal years:
             188          (A) fiscal year 2002-03;
             189          (B) fiscal year 2003-04; and
             190          (C) fiscal year 2004-05.
             191          (ii) "Minimum tax revenue distribution" means the greater of:
             192          (A) the total amount of tax revenue distributions an eligible county, city, or town
             193      receives from a tax imposed in accordance with this part for fiscal year 2000-01; or
             194          (B) the total amount of tax revenue distributions an eligible county, city, or town
             195      receives from a tax imposed in accordance with this part for fiscal year 2004-05.
             196          (b) (i) [Notwithstanding Subsection (2) and except] Except as provided in Subsection
             197      [(4)] (5)(b)(ii), beginning with fiscal year 2006-07 and ending with fiscal year 2012-13, an


             198      eligible county, city, or town shall receive a tax revenue distribution for a tax imposed in
             199      accordance with this part equal to the greater of:
             200          (A) the payment required by Subsection (2); or
             201          (B) the minimum tax revenue distribution.
             202          (ii) If the tax revenue distribution required by Subsection [(4)] (5)(b)(i) for an eligible
             203      county, city, or town is equal to the amount described in Subsection [(4)] (5)(b)(i)(A) for three
             204      consecutive fiscal years, for fiscal years beginning with the fiscal year immediately following
             205      that three consecutive fiscal year period, the eligible county, city, or town shall receive the tax
             206      revenue distribution equal to the payment required by Subsection (2).
             207          (c) For a fiscal year beginning with fiscal year 2013-14 and ending with fiscal year
             208      2015-16, an eligible county, city, or town shall receive the minimum tax revenue distribution
             209      for that fiscal year if for fiscal year 2012-13 the payment required by Subsection (2) to that
             210      eligible county, city, or town is less than or equal to the product of:
             211          (i) the minimum tax revenue distribution; and
             212          (ii) .90.
             213          [(5)] (6) (a) Population figures for purposes of this section shall be based on the most
             214      recent official census or census estimate of the United States Census Bureau.
             215          (b) If a needed population estimate is not available from the United States Census
             216      Bureau, population figures shall be derived from the estimate from the Utah Population
             217      Estimates Committee created by executive order of the governor.
             218          [(6)] (c) The population of a county for purposes of this section shall be determined
             219      [solely] only from the unincorporated area of the county.
             220          Section 3. Section 59-12-2103 is amended to read:
             221           59-12-2103. Imposition of tax -- Base -- Rate -- Expenditure of revenues collected
             222      from the tax -- Administration, collection, and enforcement of tax by commission --
             223      Administrative fee -- Enactment or repeal of tax -- Annexation -- Notice.
             224          (1) (a) Subject to the other provisions of this section and except as provided in
             225      Subsection (2), beginning on January 1, 2009 and ending on June 30, 2016, if a city or town


             226      receives a distribution for the 12 consecutive months of fiscal year 2005-06 because the city or
             227      town would have received a tax revenue distribution of less than .75% of the taxable sales
             228      within the boundaries of the city or town but for Subsection 59-12-205 [(3)](4)(a), the city or
             229      town legislative body may impose a sales and use tax of up to .20% on the transactions:
             230          (i) described in Subsection 59-12-103 (1); and
             231          (ii) within the city or town.
             232          (b) A city or town legislative body that imposes a tax under Subsection (1)(a) shall
             233      expend the revenues collected from the tax for the same purposes for which the city or town
             234      may expend the city's or town's general fund revenues.
             235          (c) For purposes of this Subsection (1), the location of a transaction shall be
             236      determined in accordance with Sections 59-12-211 through 59-12-215 .
             237          (2) (a) A city or town legislative body may not impose a tax under this section on:
             238          (i) the sales and uses described in Section 59-12-104 to the extent the sales and uses
             239      are exempt from taxation under Section 59-12-104 ; and
             240          (ii) except as provided in Subsection (2)(b), amounts paid or charged for food and food
             241      ingredients.
             242          (b) A city or town legislative body imposing a tax under this section shall impose the
             243      tax on amounts paid or charged for food and food ingredients if the food and food ingredients
             244      are sold as part of a bundled transaction attributable to food and food ingredients and tangible
             245      personal property other than food and food ingredients.
             246          (3) To impose a tax under this part, a city or town legislative body shall obtain
             247      approval from a majority of the members of the city or town legislative body.
             248          (4) The commission shall transmit revenues collected within a city or town from a tax
             249      under this part:
             250          (a) to the city or town legislative body;
             251          (b) monthly; and
             252          (c) by electronic funds transfer.
             253          (5) (a) Except as provided in Subsection (5)(b), the commission shall administer,


             254      collect, and enforce a tax under this part in accordance with:
             255          (i) the same procedures used to administer, collect, and enforce the tax under:
             256          (A) Part 1, Tax Collection; or
             257          (B) Part 2, Local Sales and Use Tax Act; and
             258          (ii) Chapter 1, General Taxation Policies.
             259          (b) A tax under this part is not subject to Subsections 59-12-205 (2) through (6).
             260          (6) (a) The commission may retain an amount of tax collected under this part of not to
             261      exceed the lesser of:
             262          (i) 1.5%; or
             263          (ii) an amount equal to the cost to the commission of administering this part.
             264          (b) Any amount the commission retains under Subsection (6)(a) shall be:
             265          (i) deposited into the Sales and Use Tax Administrative Fees Account; and
             266          (ii) used as provided in Subsection 59-12-206 (2).
             267          (7) (a) (i) Except as provided in Subsection (7)(b) or (c), if, on or after January 1, 2009,
             268      a city or town enacts or repeals a tax or changes the rate of a tax under this part, the enactment,
             269      repeal, or change shall take effect:
             270          (A) on the first day of a calendar quarter; and
             271          (B) after a 90-day period beginning on the date the commission receives notice meeting
             272      the requirements of Subsection (7)(a)(i) from the city or town.
             273          (ii) The notice described in Subsection (7)(a)(i)(B) shall state:
             274          (A) that the city or town will enact or repeal a tax or change the rate of the tax under
             275      this part;
             276          (B) the statutory authority for the tax described in Subsection (7)(a)(ii)(A);
             277          (C) the effective date of the tax described in Subsection (7)(a)(ii)(A); and
             278          (D) if the city or town enacts the tax or changes the rate of the tax described in
             279      Subsection (7)(a)(ii)(A), the rate of the tax.
             280          (b) (i) If the billing period for a transaction begins before the enactment of the tax or
             281      the tax rate increase under Subsection (1), the enactment of a tax or a tax rate increase shall


             282      take effect on the first day of the first billing period that begins after the effective date of the
             283      enactment of the tax or the tax rate increase.
             284          (ii) If the billing period for a transaction begins before the effective date of the repeal
             285      of the tax or the tax rate decrease imposed under Subsection (1), the repeal of a tax or a tax rate
             286      decrease shall take effect on the first day of the last billing period that began before the
             287      effective date of the repeal of the tax or the tax rate decrease.
             288          (c) (i) If a tax due under this part on a catalogue sale is computed on the basis of sales
             289      and use tax rates published in the catalogue, an enactment, repeal, or change in the rate of a tax
             290      described in Subsection (7)(a)(i) takes effect:
             291          (A) on the first day of a calendar quarter; and
             292          (B) beginning 60 days after the effective date of the enactment, repeal, or change in the
             293      rate of the tax under Subsection (7)(a)(i).
             294          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             295      commission may by rule define the term "catalogue sale."
             296          (d) (i) Except as provided in Subsection (7)(e) or (f), if, for an annexation that occurs
             297      on or after January 1, 2009, the annexation will result in the enactment, repeal, or change in the
             298      rate of a tax under this part for an annexing area, the enactment, repeal, or change shall take
             299      effect:
             300          (A) on the first day of a calendar quarter; and
             301          (B) after a 90-day period beginning on the date the commission receives notice meeting
             302      the requirements of Subsection (7)(d)(ii) from the city or town that annexes the annexing area.
             303          (ii) The notice described in Subsection (7)(d)(i)(B) shall state:
             304          (A) that the annexation described in Subsection (7)(d)(i)(B) will result in the
             305      enactment, repeal, or change in the rate of a tax under this part for the annexing area;
             306          (B) the statutory authority for the tax described in Subsection (7)(d)(ii)(A);
             307          (C) the effective date of the tax described in Subsection (7)(d)(ii)(A); and
             308          (D) if the city or town enacts the tax or changes the rate of the tax described in
             309      Subsection (7)(d)(ii)(A), the rate of the tax.


             310          (e) (i) If the billing period for a transaction begins before the effective date of the
             311      enactment of the tax or a tax rate increase under Subsection (1), the enactment of a tax or a tax
             312      rate increase shall take effect on the first day of the first billing period that begins after the
             313      effective date of the enactment of the tax or the tax rate increase.
             314          (ii) If the billing period for a transaction begins before the effective date of the repeal
             315      of the tax or the tax rate decrease imposed under Subsection (1), the repeal of a tax or a tax rate
             316      decrease shall take effect on the first day of the last billing period that began before the
             317      effective date of the repeal of the tax or the tax rate decrease.
             318          (f) (i) If a tax due under this part on a catalogue sale is computed on the basis of sales
             319      and use tax rates published in the catalogue, an enactment, repeal, or change in the rate of a tax
             320      described in Subsection (7)(d)(i) takes effect:
             321          (A) on the first day of a calendar quarter; and
             322          (B) beginning 60 days after the effective date of the enactment, repeal, or change under
             323      Subsection (7)(d)(i).
             324          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             325      commission may by rule define the term "catalogue sale".
             326          Section 4. Effective date.
             327          This bill takes effect on July 1, 2011.


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