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S.B. 69

             1     

SALES AND USE TAX EXEMPTION FOR TEXTBOOKS FOR

             2     
HIGHER EDUCATION

             3     
2011 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Karen Mayne

             6     
House Sponsor: Johnny Anderson

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill amends the Sales and Use Tax Act to provide an exemption for certain sales of
             11      a textbook for a higher education course.
             12      Highlighted Provisions:
             13          This bill:
             14          .    defines terms;
             15          .    provides an exemption for certain sales of a textbook for a higher education course;
             16          .    addresses seller recordkeeping requirements for purposes of the exemption;
             17          .    grants rulemaking authority to the State Tax Commission; and
             18          .    makes technical and conforming changes.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          This bill takes effect on July 1, 2011.
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          59-12-102, as last amended by Laws of Utah 2010, Chapters 88, 142, 234, and 263
             26          59-12-104, as last amended by Laws of Utah 2010, Chapters 88, 209, and 364
             27      ENACTS:


             28          59-12-104.4, Utah Code Annotated 1953
             29     
             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 59-12-102 is amended to read:
             32           59-12-102. Definitions.
             33          As used in this chapter:
             34          (1) "800 service" means a telecommunications service that:
             35          (a) allows a caller to dial a toll-free number without incurring a charge for the call; and
             36          (b) is typically marketed:
             37          (i) under the name 800 toll-free calling;
             38          (ii) under the name 855 toll-free calling;
             39          (iii) under the name 866 toll-free calling;
             40          (iv) under the name 877 toll-free calling;
             41          (v) under the name 888 toll-free calling; or
             42          (vi) under a name similar to Subsections (1)(b)(i) through (v) as designated by the
             43      Federal Communications Commission.
             44          (2) (a) "900 service" means an inbound toll telecommunications service that:
             45          (i) a subscriber purchases;
             46          (ii) allows a customer of the subscriber described in Subsection (2)(a)(i) to call in to
             47      the subscriber's:
             48          (A) prerecorded announcement; or
             49          (B) live service; and
             50          (iii) is typically marketed:
             51          (A) under the name 900 service; or
             52          (B) under a name similar to Subsection (2)(a)(iii)(A) as designated by the Federal
             53      Communications Commission.
             54          (b) "900 service" does not include a charge for:
             55          (i) a collection service a seller of a telecommunications service provides to a
             56      subscriber; or
             57          (ii) the following a subscriber sells to the subscriber's customer:
             58          (A) a product; or


             59          (B) a service.
             60          (3) (a) "Admission or user fees" includes season passes.
             61          (b) "Admission or user fees" does not include annual membership dues to private
             62      organizations.
             63          (4) "Agreement" means the Streamlined Sales and Use Tax Agreement adopted on
             64      November 12, 2002, including amendments made to the Streamlined Sales and Use Tax
             65      Agreement after November 12, 2002.
             66          (5) "Agreement combined tax rate" means the sum of the tax rates:
             67          (a) listed under Subsection (6); and
             68          (b) that are imposed within a local taxing jurisdiction.
             69          (6) "Agreement sales and use tax" means a tax imposed under:
             70          (a) Subsection 59-12-103 (2)(a)(i)(A);
             71          (b) Subsection 59-12-103 (2)(b)(i);
             72          (c) Subsection 59-12-103 (2)(c)(i);
             73          (d) Subsection 59-12-103 (2)(d)(i)(A)(I);
             74          (e) Section 59-12-204 ;
             75          (f) Section 59-12-401 ;
             76          (g) Section 59-12-402 ;
             77          (h) Section 59-12-703 ;
             78          (i) Section 59-12-802 ;
             79          (j) Section 59-12-804 ;
             80          (k) Section 59-12-1102 ;
             81          (l) Section 59-12-1302 ;
             82          (m) Section 59-12-1402 ;
             83          (n) Section 59-12-1802 ;
             84          (o) Section 59-12-2003 ;
             85          (p) Section 59-12-2103 ;
             86          (q) Section 59-12-2213 ;
             87          (r) Section 59-12-2214 ;
             88          (s) Section 59-12-2215 ;
             89          (t) Section 59-12-2216 ;


             90          (u) Section 59-12-2217 ; or
             91          (v) Section 59-12-2218 .
             92          (7) "Aircraft" is as defined in Section 72-10-102 .
             93          (8) "Aircraft maintenance, repair, and overhaul provider" means a business entity:
             94          (a) except for an airline as defined in Section 59-2-102 or an affiliated group as defined
             95      in Subsection 59-12-107 (1)(f) of an airline; and
             96          (b) that has the workers, expertise, and facilities to perform the following, regardless of
             97      whether the business entity performs the following in this state:
             98          (i) check, diagnose, overhaul, and repair:
             99          (A) an onboard system of a fixed wing turbine powered aircraft; and
             100          (B) the parts that comprise an onboard system of a fixed wing turbine powered aircraft;
             101          (ii) assemble, change, dismantle, inspect, and test a fixed wing turbine powered aircraft
             102      engine;
             103          (iii) perform at least the following maintenance on a fixed wing turbine powered
             104      aircraft:
             105          (A) an inspection;
             106          (B) a repair, including a structural repair or modification;
             107          (C) changing landing gear; and
             108          (D) addressing issues related to an aging fixed wing turbine powered aircraft;
             109          (iv) completely remove the existing paint of a fixed wing turbine powered aircraft and
             110      completely apply new paint to the fixed wing turbine powered aircraft; and
             111          (v) refurbish the interior of a fixed wing turbine powered aircraft in a manner that
             112      results in a change in the fixed wing turbine powered aircraft's certification requirements by the
             113      authority that certifies the fixed wing turbine powered aircraft.
             114          (9) "Alcoholic beverage" means a beverage that:
             115          (a) is suitable for human consumption; and
             116          (b) contains .5% or more alcohol by volume.
             117          (10) (a) "Ancillary service" means a service associated with, or incidental to, the
             118      provision of telecommunications service.
             119          (b) "Ancillary service" includes:
             120          (i) a conference bridging service;


             121          (ii) a detailed communications billing service;
             122          (iii) directory assistance;
             123          (iv) a vertical service; or
             124          (v) a voice mail service.
             125          (11) "Area agency on aging" is as defined in Section 62A-3-101 .
             126          (12) "Assisted amusement device" means an amusement device, skill device, or ride
             127      device that is started and stopped by an individual:
             128          (a) who is not the purchaser or renter of the right to use or operate the amusement
             129      device, skill device, or ride device; and
             130          (b) at the direction of the seller of the right to use the amusement device, skill device,
             131      or ride device.
             132          (13) "Assisted cleaning or washing of tangible personal property" means cleaning or
             133      washing of tangible personal property if the cleaning or washing labor is primarily performed
             134      by an individual:
             135          (a) who is not the purchaser of the cleaning or washing of the tangible personal
             136      property; and
             137          (b) at the direction of the seller of the cleaning or washing of the tangible personal
             138      property.
             139          (14) "Authorized carrier" means:
             140          (a) in the case of vehicles operated over public highways, the holder of credentials
             141      indicating that the vehicle is or will be operated pursuant to both the International Registration
             142      Plan and the International Fuel Tax Agreement;
             143          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
             144      certificate or air carrier's operating certificate; or
             145          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             146      stock, the holder of a certificate issued by the United States Surface Transportation Board.
             147          (15) (a) Except as provided in Subsection (15)(b), "biomass energy" means any of the
             148      following that is used as the primary source of energy to produce fuel or electricity:
             149          (i) material from a plant or tree; or
             150          (ii) other organic matter that is available on a renewable basis, including:
             151          (A) slash and brush from forests and woodlands;


             152          (B) animal waste;
             153          (C) methane produced:
             154          (I) at landfills; or
             155          (II) as a byproduct of the treatment of wastewater residuals;
             156          (D) aquatic plants; and
             157          (E) agricultural products.
             158          (b) "Biomass energy" does not include:
             159          (i) black liquor;
             160          (ii) treated woods; or
             161          (iii) biomass from municipal solid waste other than methane produced:
             162          (A) at landfills; or
             163          (B) as a byproduct of the treatment of wastewater residuals.
             164          (16) (a) "Bundled transaction" means the sale of two or more items of tangible personal
             165      property, products, or services if the tangible personal property, products, or services are:
             166          (i) distinct and identifiable; and
             167          (ii) sold for one nonitemized price.
             168          (b) "Bundled transaction" does not include:
             169          (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
             170      the basis of the selection by the purchaser of the items of tangible personal property included in
             171      the transaction;
             172          (ii) the sale of real property;
             173          (iii) the sale of services to real property;
             174          (iv) the retail sale of tangible personal property and a service if:
             175          (A) the tangible personal property:
             176          (I) is essential to the use of the service; and
             177          (II) is provided exclusively in connection with the service; and
             178          (B) the service is the true object of the transaction;
             179          (v) the retail sale of two services if:
             180          (A) one service is provided that is essential to the use or receipt of a second service;
             181          (B) the first service is provided exclusively in connection with the second service; and
             182          (C) the second service is the true object of the transaction;


             183          (vi) a transaction that includes tangible personal property or a product subject to
             184      taxation under this chapter and tangible personal property or a product that is not subject to
             185      taxation under this chapter if the:
             186          (A) seller's purchase price of the tangible personal property or product subject to
             187      taxation under this chapter is de minimis; or
             188          (B) seller's sales price of the tangible personal property or product subject to taxation
             189      under this chapter is de minimis; and
             190          (vii) the retail sale of tangible personal property that is not subject to taxation under
             191      this chapter and tangible personal property that is subject to taxation under this chapter if:
             192          (A) that retail sale includes:
             193          (I) food and food ingredients;
             194          (II) a drug;
             195          (III) durable medical equipment;
             196          (IV) mobility enhancing equipment;
             197          (V) an over-the-counter drug;
             198          (VI) a prosthetic device; or
             199          (VII) a medical supply; and
             200          (B) subject to Subsection (16)(f):
             201          (I) the seller's purchase price of the tangible personal property subject to taxation under
             202      this chapter is 50% or less of the seller's total purchase price of that retail sale; or
             203          (II) the seller's sales price of the tangible personal property subject to taxation under
             204      this chapter is 50% or less of the seller's total sales price of that retail sale.
             205          (c) (i) For purposes of Subsection (16)(a)(i), tangible personal property, a product, or a
             206      service that is distinct and identifiable does not include:
             207          (A) packaging that:
             208          (I) accompanies the sale of the tangible personal property, product, or service; and
             209          (II) is incidental or immaterial to the sale of the tangible personal property, product, or
             210      service;
             211          (B) tangible personal property, a product, or a service provided free of charge with the
             212      purchase of another item of tangible personal property, a product, or a service; or
             213          (C) an item of tangible personal property, a product, or a service included in the


             214      definition of "purchase price."
             215          (ii) For purposes of Subsection (16)(c)(i)(B), an item of tangible personal property, a
             216      product, or a service is provided free of charge with the purchase of another item of tangible
             217      personal property, a product, or a service if the sales price of the purchased item of tangible
             218      personal property, product, or service does not vary depending on the inclusion of the tangible
             219      personal property, product, or service provided free of charge.
             220          (d) (i) For purposes of Subsection (16)(a)(ii), property sold for one nonitemized price
             221      does not include a price that is separately identified by tangible personal property, product, or
             222      service on the following, regardless of whether the following is in paper format or electronic
             223      format:
             224          (A) a binding sales document; or
             225          (B) another supporting sales-related document that is available to a purchaser.
             226          (ii) For purposes of Subsection (16)(d)(i), a binding sales document or another
             227      supporting sales-related document that is available to a purchaser includes:
             228          (A) a bill of sale;
             229          (B) a contract;
             230          (C) an invoice;
             231          (D) a lease agreement;
             232          (E) a periodic notice of rates and services;
             233          (F) a price list;
             234          (G) a rate card;
             235          (H) a receipt; or
             236          (I) a service agreement.
             237          (e) (i) For purposes of Subsection (16)(b)(vi), the sales price of tangible personal
             238      property or a product subject to taxation under this chapter is de minimis if:
             239          (A) the seller's purchase price of the tangible personal property or product is 10% or
             240      less of the seller's total purchase price of the bundled transaction; or
             241          (B) the seller's sales price of the tangible personal property or product is 10% or less of
             242      the seller's total sales price of the bundled transaction.
             243          (ii) For purposes of Subsection (16)(b)(vi), a seller:
             244          (A) shall use the seller's purchase price or the seller's sales price to determine if the


             245      purchase price or sales price of the tangible personal property or product subject to taxation
             246      under this chapter is de minimis; and
             247          (B) may not use a combination of the seller's purchase price and the seller's sales price
             248      to determine if the purchase price or sales price of the tangible personal property or product
             249      subject to taxation under this chapter is de minimis.
             250          (iii) For purposes of Subsection (16)(b)(vi), a seller shall use the full term of a service
             251      contract to determine if the sales price of tangible personal property or a product is de minimis.
             252          (f) For purposes of Subsection (16)(b)(vii)(B), a seller may not use a combination of
             253      the seller's purchase price and the seller's sales price to determine if tangible personal property
             254      subject to taxation under this chapter is 50% or less of the seller's total purchase price or sales
             255      price of that retail sale.
             256          (17) "Certified automated system" means software certified by the governing board of
             257      the agreement that:
             258          (a) calculates the agreement sales and use tax imposed within a local taxing
             259      jurisdiction:
             260          (i) on a transaction; and
             261          (ii) in the states that are members of the agreement;
             262          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             263      member of the agreement; and
             264          (c) maintains a record of the transaction described in Subsection (17)(a)(i).
             265          (18) "Certified service provider" means an agent certified:
             266          (a) by the governing board of the agreement; and
             267          (b) to perform all of a seller's sales and use tax functions for an agreement sales and
             268      use tax other than the seller's obligation under Section 59-12-124 to remit a tax on the seller's
             269      own purchases.
             270          (19) (a) Subject to Subsection (19)(b), "clothing" means all human wearing apparel
             271      suitable for general use.
             272          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             273      commission shall make rules:
             274          (i) listing the items that constitute "clothing"; and
             275          (ii) that are consistent with the list of items that constitute "clothing" under the


             276      agreement.
             277          (20) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
             278          (21) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
             279      fuels that does not constitute industrial use under Subsection (48) or residential use under
             280      Subsection [(94)] (95).
             281          (22) (a) "Common carrier" means a person engaged in or transacting the business of
             282      transporting passengers, freight, merchandise, or other property for hire within this state.
             283          (b) (i) "Common carrier" does not include a person who, at the time the person is
             284      traveling to or from that person's place of employment, transports a passenger to or from the
             285      passenger's place of employment.
             286          (ii) For purposes of Subsection (22)(b)(i), in accordance with Title 63G, Chapter 3,
             287      Utah Administrative Rulemaking Act, the commission may make rules defining what
             288      constitutes a person's place of employment.
             289          (23) "Component part" includes:
             290          (a) poultry, dairy, and other livestock feed, and their components;
             291          (b) baling ties and twine used in the baling of hay and straw;
             292          (c) fuel used for providing temperature control of orchards and commercial
             293      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             294      off-highway type farm machinery; and
             295          (d) feed, seeds, and seedlings.
             296          (24) "Computer" means an electronic device that accepts information:
             297          (a) (i) in digital form; or
             298          (ii) in a form similar to digital form; and
             299          (b) manipulates that information for a result based on a sequence of instructions.
             300          (25) "Computer software" means a set of coded instructions designed to cause:
             301          (a) a computer to perform a task; or
             302          (b) automatic data processing equipment to perform a task.
             303          (26) (a) "Conference bridging service" means an ancillary service that links two or
             304      more participants of an audio conference call or video conference call.
             305          (b) "Conference bridging service" includes providing a telephone number as part of the
             306      ancillary service described in Subsection (26)(a).


             307          (c) "Conference bridging service" does not include a telecommunications service used
             308      to reach the ancillary service described in Subsection (26)(a).
             309          (27) "Construction materials" means any tangible personal property that will be
             310      converted into real property.
             311          (28) "Delivered electronically" means delivered to a purchaser by means other than
             312      tangible storage media.
             313          (29) (a) "Delivery charge" means a charge:
             314          (i) by a seller of:
             315          (A) tangible personal property;
             316          (B) a product transferred electronically; or
             317          (C) services; and
             318          (ii) for preparation and delivery of the tangible personal property, product transferred
             319      electronically, or services described in Subsection (29)(a)(i) to a location designated by the
             320      purchaser.
             321          (b) "Delivery charge" includes a charge for the following:
             322          (i) transportation;
             323          (ii) shipping;
             324          (iii) postage;
             325          (iv) handling;
             326          (v) crating; or
             327          (vi) packing.
             328          (30) "Detailed telecommunications billing service" means an ancillary service of
             329      separately stating information pertaining to individual calls on a customer's billing statement.
             330          (31) "Dietary supplement" means a product, other than tobacco, that:
             331          (a) is intended to supplement the diet;
             332          (b) contains one or more of the following dietary ingredients:
             333          (i) a vitamin;
             334          (ii) a mineral;
             335          (iii) an herb or other botanical;
             336          (iv) an amino acid;
             337          (v) a dietary substance for use by humans to supplement the diet by increasing the total


             338      dietary intake; or
             339          (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
             340      described in Subsections (31)(b)(i) through (v);
             341          (c) (i) except as provided in Subsection (31)(c)(ii), is intended for ingestion in:
             342          (A) tablet form;
             343          (B) capsule form;
             344          (C) powder form;
             345          (D) softgel form;
             346          (E) gelcap form; or
             347          (F) liquid form; or
             348          (ii) notwithstanding Subsection (31)(c)(i), if the product is not intended for ingestion in
             349      a form described in Subsections (31)(c)(i)(A) through (F), is not represented:
             350          (A) as conventional food; and
             351          (B) for use as a sole item of:
             352          (I) a meal; or
             353          (II) the diet; and
             354          (d) is required to be labeled as a dietary supplement:
             355          (i) identifiable by the "Supplemental Facts" box found on the label; and
             356          (ii) as required by 21 C.F.R. Sec. 101.36.
             357          (32) (a) "Direct mail" means printed material delivered or distributed by United States
             358      mail or other delivery service:
             359          (i) to:
             360          (A) a mass audience; or
             361          (B) addressees on a mailing list provided:
             362          (I) by a purchaser of the mailing list; or
             363          (II) at the discretion of the purchaser of the mailing list; and
             364          (ii) if the cost of the printed material is not billed directly to the recipients.
             365          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
             366      purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             367          (c) "Direct mail" does not include multiple items of printed material delivered to a
             368      single address.


             369          (33) "Directory assistance" means an ancillary service of providing:
             370          (a) address information; or
             371          (b) telephone number information.
             372          (34) (a) "Disposable home medical equipment or supplies" means medical equipment
             373      or supplies that:
             374          (i) cannot withstand repeated use; and
             375          (ii) are purchased by, for, or on behalf of a person other than:
             376          (A) a health care facility as defined in Section 26-21-2 ;
             377          (B) a health care provider as defined in Section 78B-3-403 ;
             378          (C) an office of a health care provider described in Subsection (34)(a)(ii)(B); or
             379          (D) a person similar to a person described in Subsections (34)(a)(ii)(A) through (C).
             380          (b) "Disposable home medical equipment or supplies" does not include:
             381          (i) a drug;
             382          (ii) durable medical equipment;
             383          (iii) a hearing aid;
             384          (iv) a hearing aid accessory;
             385          (v) mobility enhancing equipment; or
             386          (vi) tangible personal property used to correct impaired vision, including:
             387          (A) eyeglasses; or
             388          (B) contact lenses.
             389          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             390      commission may by rule define what constitutes medical equipment or supplies.
             391          (35) (a) "Drug" means a compound, substance, or preparation, or a component of a
             392      compound, substance, or preparation that is:
             393          (i) recognized in:
             394          (A) the official United States Pharmacopoeia;
             395          (B) the official Homeopathic Pharmacopoeia of the United States;
             396          (C) the official National Formulary; or
             397          (D) a supplement to a publication listed in Subsections (35)(a)(i)(A) through (C);
             398          (ii) intended for use in the:
             399          (A) diagnosis of disease;


             400          (B) cure of disease;
             401          (C) mitigation of disease;
             402          (D) treatment of disease; or
             403          (E) prevention of disease; or
             404          (iii) intended to affect:
             405          (A) the structure of the body; or
             406          (B) any function of the body.
             407          (b) "Drug" does not include:
             408          (i) food and food ingredients;
             409          (ii) a dietary supplement;
             410          (iii) an alcoholic beverage; or
             411          (iv) a prosthetic device.
             412          (36) (a) Except as provided in Subsection (36)(c), "durable medical equipment" means
             413      equipment that:
             414          (i) can withstand repeated use;
             415          (ii) is primarily and customarily used to serve a medical purpose;
             416          (iii) generally is not useful to a person in the absence of illness or injury; and
             417          (iv) is not worn in or on the body.
             418          (b) "Durable medical equipment" includes parts used in the repair or replacement of the
             419      equipment described in Subsection (36)(a).
             420          (c) Notwithstanding Subsection (36)(a), "durable medical equipment" does not include
             421      mobility enhancing equipment.
             422          (37) "Electronic" means:
             423          (a) relating to technology; and
             424          (b) having:
             425          (i) electrical capabilities;
             426          (ii) digital capabilities;
             427          (iii) magnetic capabilities;
             428          (iv) wireless capabilities;
             429          (v) optical capabilities;
             430          (vi) electromagnetic capabilities; or


             431          (vii) capabilities similar to Subsections (37)(b)(i) through (vi).
             432          (38) "Employee" is as defined in Section 59-10-401 .
             433          (39) "Fixed guideway" means a public transit facility that uses and occupies:
             434          (a) rail for the use of public transit; or
             435          (b) a separate right-of-way for the use of public transit.
             436          (40) "Fixed wing turbine powered aircraft" means an aircraft that:
             437          (a) is powered by turbine engines;
             438          (b) operates on jet fuel; and
             439          (c) has wings that are permanently attached to the fuselage of the aircraft.
             440          (41) "Fixed wireless service" means a telecommunications service that provides radio
             441      communication between fixed points.
             442          (42) (a) "Food and food ingredients" means substances:
             443          (i) regardless of whether the substances are in:
             444          (A) liquid form;
             445          (B) concentrated form;
             446          (C) solid form;
             447          (D) frozen form;
             448          (E) dried form; or
             449          (F) dehydrated form; and
             450          (ii) that are:
             451          (A) sold for:
             452          (I) ingestion by humans; or
             453          (II) chewing by humans; and
             454          (B) consumed for the substance's:
             455          (I) taste; or
             456          (II) nutritional value.
             457          (b) "Food and food ingredients" includes an item described in Subsection [(78)]
             458      (79)(b)(iii).
             459          (c) "Food and food ingredients" does not include:
             460          (i) an alcoholic beverage;
             461          (ii) tobacco; or


             462          (iii) prepared food.
             463          (43) (a) "Fundraising sales" means sales:
             464          (i) (A) made by a school; or
             465          (B) made by a school student;
             466          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             467      materials, or provide transportation; and
             468          (iii) that are part of an officially sanctioned school activity.
             469          (b) For purposes of Subsection (43)(a)(iii), "officially sanctioned school activity"
             470      means a school activity:
             471          (i) that is conducted in accordance with a formal policy adopted by the school or school
             472      district governing the authorization and supervision of fundraising activities;
             473          (ii) that does not directly or indirectly compensate an individual teacher or other
             474      educational personnel by direct payment, commissions, or payment in kind; and
             475          (iii) the net or gross revenues from which are deposited in a dedicated account
             476      controlled by the school or school district.
             477          (44) "Geothermal energy" means energy contained in heat that continuously flows
             478      outward from the earth that is used as the sole source of energy to produce electricity.
             479          (45) "Governing board of the agreement" means the governing board of the agreement
             480      that is:
             481          (a) authorized to administer the agreement; and
             482          (b) established in accordance with the agreement.
             483          (46) (a) For purposes of Subsection 59-12-104 (41), "governmental entity" means:
             484          (i) the executive branch of the state, including all departments, institutions, boards,
             485      divisions, bureaus, offices, commissions, and committees;
             486          (ii) the judicial branch of the state, including the courts, the Judicial Council, the
             487      Office of the Court Administrator, and similar administrative units in the judicial branch;
             488          (iii) the legislative branch of the state, including the House of Representatives, the
             489      Senate, the Legislative Printing Office, the Office of Legislative Research and General
             490      Counsel, the Office of the Legislative Auditor General, and the Office of the Legislative Fiscal
             491      Analyst;
             492          (iv) the National Guard;


             493          (v) an independent entity as defined in Section 63E-1-102 ; or
             494          (vi) a political subdivision as defined in Section 17B-1-102 .
             495          (b) "Governmental entity" does not include the state systems of public and higher
             496      education, including:
             497          (i) a college campus of the Utah College of Applied Technology;
             498          (ii) a school;
             499          (iii) the State Board of Education;
             500          (iv) the State Board of Regents; or
             501          (v) [a state] an institution of higher education [as defined in Section 53B-3-102 ].
             502          (47) "Hydroelectric energy" means water used as the sole source of energy to produce
             503      electricity.
             504          (48) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
             505      other fuels:
             506          (a) in mining or extraction of minerals;
             507          (b) in agricultural operations to produce an agricultural product up to the time of
             508      harvest or placing the agricultural product into a storage facility, including:
             509          (i) commercial greenhouses;
             510          (ii) irrigation pumps;
             511          (iii) farm machinery;
             512          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             513      registered under Title 41, Chapter 1a, Part 2, Registration; and
             514          (v) other farming activities;
             515          (c) in manufacturing tangible personal property at an establishment described in SIC
             516      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             517      Executive Office of the President, Office of Management and Budget;
             518          (d) by a scrap recycler if:
             519          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             520      one or more of the following items into prepared grades of processed materials for use in new
             521      products:
             522          (A) iron;
             523          (B) steel;


             524          (C) nonferrous metal;
             525          (D) paper;
             526          (E) glass;
             527          (F) plastic;
             528          (G) textile; or
             529          (H) rubber; and
             530          (ii) the new products under Subsection (48)(d)(i) would otherwise be made with
             531      nonrecycled materials; or
             532          (e) in producing a form of energy or steam described in Subsection 54-2-1 (2)(a) by a
             533      cogeneration facility as defined in Section 54-2-1 .
             534          (49) (a) Except as provided in Subsection (49)(b), "installation charge" means a charge
             535      for installing:
             536          (i) tangible personal property; or
             537          (ii) a product transferred electronically.
             538          (b) "Installation charge" does not include a charge for repairs or renovations of:
             539          (i) tangible personal property; or
             540          (ii) a product transferred electronically.
             541          (50) "Institution of higher education" means an institution of higher education listed in
             542      Section 53B-2-101 .
             543          [(50)] (51) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             544      personal property or a product transferred electronically for:
             545          (i) (A) a fixed term; or
             546          (B) an indeterminate term; and
             547          (ii) consideration.
             548          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
             549      amount of consideration may be increased or decreased by reference to the amount realized
             550      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             551      Code.
             552          (c) "Lease" or "rental" does not include:
             553          (i) a transfer of possession or control of property under a security agreement or
             554      deferred payment plan that requires the transfer of title upon completion of the required


             555      payments;
             556          (ii) a transfer of possession or control of property under an agreement that requires the
             557      transfer of title:
             558          (A) upon completion of required payments; and
             559          (B) if the payment of an option price does not exceed the greater of:
             560          (I) $100; or
             561          (II) 1% of the total required payments; or
             562          (iii) providing tangible personal property along with an operator for a fixed period of
             563      time or an indeterminate period of time if the operator is necessary for equipment to perform as
             564      designed.
             565          (d) For purposes of Subsection [(50)](51)(c)(iii), an operator is necessary for
             566      equipment to perform as designed if the operator's duties exceed the:
             567          (i) set-up of tangible personal property;
             568          (ii) maintenance of tangible personal property; or
             569          (iii) inspection of tangible personal property.
             570          [(51)] (52) "Load and leave" means delivery to a purchaser by use of a tangible storage
             571      media if the tangible storage media is not physically transferred to the purchaser.
             572          [(52)] (53) "Local taxing jurisdiction" means a:
             573          (a) county that is authorized to impose an agreement sales and use tax;
             574          (b) city that is authorized to impose an agreement sales and use tax; or
             575          (c) town that is authorized to impose an agreement sales and use tax.
             576          [(53)] (54) "Manufactured home" is as defined in Section 58-56-3 .
             577          [(54)] (55) For purposes of Section 59-12-104 , "manufacturing facility" means:
             578          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
             579      Industrial Classification Manual of the federal Executive Office of the President, Office of
             580      Management and Budget;
             581          (b) a scrap recycler if:
             582          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             583      one or more of the following items into prepared grades of processed materials for use in new
             584      products:
             585          (A) iron;


             586          (B) steel;
             587          (C) nonferrous metal;
             588          (D) paper;
             589          (E) glass;
             590          (F) plastic;
             591          (G) textile; or
             592          (H) rubber; and
             593          (ii) the new products under Subsection [(54)] (55)(b)(i) would otherwise be made with
             594      nonrecycled materials; or
             595          (c) a cogeneration facility as defined in Section 54-2-1 .
             596          [(55)] (56) "Member of the immediate family of the producer" means a person who is
             597      related to a producer described in Subsection 59-12-104 (20)(a) as a:
             598          (a) child or stepchild, regardless of whether the child or stepchild is:
             599          (i) an adopted child or adopted stepchild; or
             600          (ii) a foster child or foster stepchild;
             601          (b) grandchild or stepgrandchild;
             602          (c) grandparent or stepgrandparent;
             603          (d) nephew or stepnephew;
             604          (e) niece or stepniece;
             605          (f) parent or stepparent;
             606          (g) sibling or stepsibling;
             607          (h) spouse;
             608          (i) person who is the spouse of a person described in Subsections [(55)] (56)(a) through
             609      (g); or
             610          (j) person similar to a person described in Subsections [(55)] (56)(a) through (i) as
             611      determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             612      Administrative Rulemaking Act.
             613          [(56)] (57) "Mobile home" is as defined in Section 58-56-3 .
             614          [(57)] (58) "Mobile telecommunications service" is as defined in the Mobile
             615      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             616          [(58)] (59) (a) "Mobile wireless service" means a telecommunications service,


             617      regardless of the technology used, if:
             618          (i) the origination point of the conveyance, routing, or transmission is not fixed;
             619          (ii) the termination point of the conveyance, routing, or transmission is not fixed; or
             620          (iii) the origination point described in Subsection [(58)] (59)(a)(i) and the termination
             621      point described in Subsection [(58)] (59)(a)(ii) are not fixed.
             622          (b) "Mobile wireless service" includes a telecommunications service that is provided
             623      by a commercial mobile radio service provider.
             624          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             625      commission may by rule define "commercial mobile radio service provider."
             626          [(59)] (60) (a) Except as provided in Subsection [(59)] (60)(c), "mobility enhancing
             627      equipment" means equipment that is:
             628          (i) primarily and customarily used to provide or increase the ability to move from one
             629      place to another;
             630          (ii) appropriate for use in a:
             631          (A) home; or
             632          (B) motor vehicle; and
             633          (iii) not generally used by persons with normal mobility.
             634          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
             635      the equipment described in Subsection [(59)] (60)(a).
             636          (c) Notwithstanding Subsection [(59)] (60)(a), "mobility enhancing equipment" does
             637      not include:
             638          (i) a motor vehicle;
             639          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
             640      vehicle manufacturer;
             641          (iii) durable medical equipment; or
             642          (iv) a prosthetic device.
             643          [(60)] (61) "Model 1 seller" means a seller registered under the agreement that has
             644      selected a certified service provider as the seller's agent to perform all of the seller's sales and
             645      use tax functions for agreement sales and use taxes other than the seller's obligation under
             646      Section 59-12-124 to remit a tax on the seller's own purchases.
             647          [(61)] (62) "Model 2 seller" means a seller registered under the agreement that:


             648          (a) except as provided in Subsection [(61)] (62)(b), has selected a certified automated
             649      system to perform the seller's sales tax functions for agreement sales and use taxes; and
             650          (b) notwithstanding Subsection [(61)] (62)(a), retains responsibility for remitting all of
             651      the sales tax:
             652          (i) collected by the seller; and
             653          (ii) to the appropriate local taxing jurisdiction.
             654          [(62)] (63) (a) Subject to Subsection [(62)] (63)(b), "model 3 seller" means a seller
             655      registered under the agreement that has:
             656          (i) sales in at least five states that are members of the agreement;
             657          (ii) total annual sales revenues of at least $500,000,000;
             658          (iii) a proprietary system that calculates the amount of tax:
             659          (A) for an agreement sales and use tax; and
             660          (B) due to each local taxing jurisdiction; and
             661          (iv) entered into a performance agreement with the governing board of the agreement.
             662          (b) For purposes of Subsection [(62)] (63)(a), "model 3 seller" includes an affiliated
             663      group of sellers using the same proprietary system.
             664          [(63)] (64) "Model 4 seller" means a seller that is registered under the agreement and is
             665      not a model 1 seller, model 2 seller, or model 3 seller.
             666          [(64)] (65) "Modular home" means a modular unit as defined in Section 58-56-3 .
             667          [(65)] (66) "Motor vehicle" is as defined in Section 41-1a-102 .
             668          [(66)] (67) "Oil shale" means a group of fine black to dark brown shales containing
             669      bituminous material that yields petroleum upon distillation.
             670          [(67)] (68) (a) "Other fuels" means products that burn independently to produce heat or
             671      energy.
             672          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             673      personal property.
             674          [(68)] (69) (a) "Paging service" means a telecommunications service that provides
             675      transmission of a coded radio signal for the purpose of activating a specific pager.
             676          (b) For purposes of Subsection [(68)] (69)(a), the transmission of a coded radio signal
             677      includes a transmission by message or sound.
             678          [(69)] (70) "Pawnbroker" is as defined in Section 13-32a-102 .


             679          [(70)] (71) "Pawn transaction" is as defined in Section 13-32a-102 .
             680          [(71)] (72) (a) "Permanently attached to real property" means that for tangible personal
             681      property attached to real property:
             682          (i) the attachment of the tangible personal property to the real property:
             683          (A) is essential to the use of the tangible personal property; and
             684          (B) suggests that the tangible personal property will remain attached to the real
             685      property in the same place over the useful life of the tangible personal property; or
             686          (ii) if the tangible personal property is detached from the real property, the detachment
             687      would:
             688          (A) cause substantial damage to the tangible personal property; or
             689          (B) require substantial alteration or repair of the real property to which the tangible
             690      personal property is attached.
             691          (b) "Permanently attached to real property" includes:
             692          (i) the attachment of an accessory to the tangible personal property if the accessory is:
             693          (A) essential to the operation of the tangible personal property; and
             694          (B) attached only to facilitate the operation of the tangible personal property;
             695          (ii) a temporary detachment of tangible personal property from real property for a
             696      repair or renovation if the repair or renovation is performed where the tangible personal
             697      property and real property are located; or
             698          (iii) property attached to oil, gas, or water pipelines, except for the property listed in
             699      Subsection [(71)] (72)(c)(iii) or (iv).
             700          (c) "Permanently attached to real property" does not include:
             701          (i) the attachment of portable or movable tangible personal property to real property if
             702      that portable or movable tangible personal property is attached to real property only for:
             703          (A) convenience;
             704          (B) stability; or
             705          (C) for an obvious temporary purpose;
             706          (ii) the detachment of tangible personal property from real property except for the
             707      detachment described in Subsection [(71)] (72)(b)(ii);
             708          (iii) an attachment of the following tangible personal property to real property if the
             709      attachment to real property is only through a line that supplies water, electricity, gas,


             710      telecommunications, cable, or supplies a similar item as determined by the commission by rule
             711      made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
             712          (A) a computer;
             713          (B) a telephone;
             714          (C) a television; or
             715          (D) tangible personal property similar to Subsections [(71)] (72)(c)(iii)(A) through (C)
             716      as determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             717      Administrative Rulemaking Act; or
             718          (iv) an item listed in Subsection [(111)] (112)(c).
             719          [(72)] (73) "Person" includes any individual, firm, partnership, joint venture,
             720      association, corporation, estate, trust, business trust, receiver, syndicate, this state, any county,
             721      city, municipality, district, or other local governmental entity of the state, or any group or
             722      combination acting as a unit.
             723          [(73)] (74) "Place of primary use":
             724          (a) for telecommunications service other than mobile telecommunications service,
             725      means the street address representative of where the customer's use of the telecommunications
             726      service primarily occurs, which shall be:
             727          (i) the residential street address of the customer; or
             728          (ii) the primary business street address of the customer; or
             729          (b) for mobile telecommunications service, is as defined in the Mobile
             730      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             731          [(74)] (75) (a) "Postpaid calling service" means a telecommunications service a person
             732      obtains by making a payment on a call-by-call basis:
             733          (i) through the use of a:
             734          (A) bank card;
             735          (B) credit card;
             736          (C) debit card; or
             737          (D) travel card; or
             738          (ii) by a charge made to a telephone number that is not associated with the origination
             739      or termination of the telecommunications service.
             740          (b) "Postpaid calling service" includes a service, except for a prepaid wireless calling


             741      service, that would be a prepaid wireless calling service if the service were exclusively a
             742      telecommunications service.
             743          [(75)] (76) "Postproduction" means an activity related to the finishing or duplication of
             744      a medium described in Subsection 59-12-104 (54)(a).
             745          [(76)] (77) "Prepaid calling service" means a telecommunications service:
             746          (a) that allows a purchaser access to telecommunications service that is exclusively
             747      telecommunications service;
             748          (b) that:
             749          (i) is paid for in advance; and
             750          (ii) enables the origination of a call using an:
             751          (A) access number; or
             752          (B) authorization code;
             753          (c) that is dialed:
             754          (i) manually; or
             755          (ii) electronically; and
             756          (d) sold in predetermined units or dollars that decline:
             757          (i) by a known amount; and
             758          (ii) with use.
             759          [(77)] (78) "Prepaid wireless calling service" means a telecommunications service:
             760          (a) that provides the right to utilize:
             761          (i) mobile wireless service; and
             762          (ii) other service that is not a telecommunications service, including:
             763          (A) the download of a product transferred electronically;
             764          (B) a content service; or
             765          (C) an ancillary service;
             766          (b) that:
             767          (i) is paid for in advance; and
             768          (ii) enables the origination of a call using an:
             769          (A) access number; or
             770          (B) authorization code;
             771          (c) that is dialed:


             772          (i) manually; or
             773          (ii) electronically; and
             774          (d) sold in predetermined units or dollars that decline:
             775          (i) by a known amount; and
             776          (ii) with use.
             777          [(78)] (79) (a) "Prepared food" means:
             778          (i) food:
             779          (A) sold in a heated state; or
             780          (B) heated by a seller;
             781          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             782      item; or
             783          (iii) except as provided in Subsection [(78)] (79)(c), food sold with an eating utensil
             784      provided by the seller, including a:
             785          (A) plate;
             786          (B) knife;
             787          (C) fork;
             788          (D) spoon;
             789          (E) glass;
             790          (F) cup;
             791          (G) napkin; or
             792          (H) straw.
             793          (b) "Prepared food" does not include:
             794          (i) food that a seller only:
             795          (A) cuts;
             796          (B) repackages; or
             797          (C) pasteurizes; or
             798          (ii) (A) the following:
             799          (I) raw egg;
             800          (II) raw fish;
             801          (III) raw meat;
             802          (IV) raw poultry; or


             803          (V) a food containing an item described in Subsections [(78)] (79)(b)(ii)(A)(I) through
             804      (IV); and
             805          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             806      Food and Drug Administration's Food Code that a consumer cook the items described in
             807      Subsection [(78)] (79)(b)(ii)(A) to prevent food borne illness; or
             808          (iii) the following if sold without eating utensils provided by the seller:
             809          (A) food and food ingredients sold by a seller if the seller's proper primary
             810      classification under the 2002 North American Industry Classification System of the federal
             811      Executive Office of the President, Office of Management and Budget, is manufacturing in
             812      Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
             813      Manufacturing;
             814          (B) food and food ingredients sold in an unheated state:
             815          (I) by weight or volume; and
             816          (II) as a single item; or
             817          (C) a bakery item, including:
             818          (I) a bagel;
             819          (II) a bar;
             820          (III) a biscuit;
             821          (IV) bread;
             822          (V) a bun;
             823          (VI) a cake;
             824          (VII) a cookie;
             825          (VIII) a croissant;
             826          (IX) a danish;
             827          (X) a donut;
             828          (XI) a muffin;
             829          (XII) a pastry;
             830          (XIII) a pie;
             831          (XIV) a roll;
             832          (XV) a tart;
             833          (XVI) a torte; or


             834          (XVII) a tortilla.
             835          (c) Notwithstanding Subsection [(78)] (79)(a)(iii), an eating utensil provided by the
             836      seller does not include the following used to transport the food:
             837          (i) a container; or
             838          (ii) packaging.
             839          [(79)] (80) "Prescription" means an order, formula, or recipe that is issued:
             840          (a) (i) orally;
             841          (ii) in writing;
             842          (iii) electronically; or
             843          (iv) by any other manner of transmission; and
             844          (b) by a licensed practitioner authorized by the laws of a state.
             845          [(80)] (81) (a) Except as provided in Subsection [(80)] (81)(b)(ii) or (iii), "prewritten
             846      computer software" means computer software that is not designed and developed:
             847          (i) by the author or other creator of the computer software; and
             848          (ii) to the specifications of a specific purchaser.
             849          (b) "Prewritten computer software" includes:
             850          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
             851      software is not designed and developed:
             852          (A) by the author or other creator of the computer software; and
             853          (B) to the specifications of a specific purchaser;
             854          (ii) notwithstanding Subsection [(80)] (81)(a), computer software designed and
             855      developed by the author or other creator of the computer software to the specifications of a
             856      specific purchaser if the computer software is sold to a person other than the purchaser; or
             857          (iii) notwithstanding Subsection [(80)] (81)(a) and except as provided in Subsection
             858      [(80)] (81)(c), prewritten computer software or a prewritten portion of prewritten computer
             859      software:
             860          (A) that is modified or enhanced to any degree; and
             861          (B) if the modification or enhancement described in Subsection [(80)] (81)(b)(iii)(A) is
             862      designed and developed to the specifications of a specific purchaser.
             863          (c) Notwithstanding Subsection [(80)] (81)(b)(iii), "prewritten computer software"
             864      does not include a modification or enhancement described in Subsection [(80)] (81)(b)(iii) if


             865      the charges for the modification or enhancement are:
             866          (i) reasonable; and
             867          (ii) separately stated on the invoice or other statement of price provided to the
             868      purchaser.
             869          [(81)] (82) (a) "Private communication service" means a telecommunications service:
             870          (i) that entitles a customer to exclusive or priority use of one or more communications
             871      channels between or among termination points; and
             872          (ii) regardless of the manner in which the one or more communications channels are
             873      connected.
             874          (b) "Private communications service" includes the following provided in connection
             875      with the use of one or more communications channels:
             876          (i) an extension line;
             877          (ii) a station;
             878          (iii) switching capacity; or
             879          (iv) another associated service that is provided in connection with the use of one or
             880      more communications channels as defined in Section 59-12-215 .
             881          [(82)] (83) (a) "Prosthetic device" means a device that is worn on or in the body to:
             882          (i) artificially replace a missing portion of the body;
             883          (ii) prevent or correct a physical deformity or physical malfunction; or
             884          (iii) support a weak or deformed portion of the body.
             885          (b) "Prosthetic device" includes:
             886          (i) parts used in the repairs or renovation of a prosthetic device;
             887          (ii) replacement parts for a prosthetic device;
             888          (iii) a dental prosthesis; or
             889          (iv) a hearing aid.
             890          (c) "Prosthetic device" does not include:
             891          (i) corrective eyeglasses; or
             892          (ii) contact lenses.
             893          [(83)] (84) (a) "Protective equipment" means an item:
             894          (i) for human wear; and
             895          (ii) that is:


             896          (A) designed as protection:
             897          (I) to the wearer against injury or disease; or
             898          (II) against damage or injury of other persons or property; and
             899          (B) not suitable for general use.
             900          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             901      commission shall make rules:
             902          (i) listing the items that constitute "protective equipment"; and
             903          (ii) that are consistent with the list of items that constitute "protective equipment"
             904      under the agreement.
             905          [(84)] (85) (a) For purposes of Subsection 59-12-104 (41), "publication" means any
             906      written or printed matter, other than a photocopy:
             907          (i) regardless of:
             908          (A) characteristics;
             909          (B) copyright;
             910          (C) form;
             911          (D) format;
             912          (E) method of reproduction; or
             913          (F) source; and
             914          (ii) made available in printed or electronic format.
             915          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             916      commission may by rule define the term "photocopy."
             917          [(85)] (86) (a) "Purchase price" and "sales price" mean the total amount of
             918      consideration:
             919          (i) valued in money; and
             920          (ii) for which tangible personal property, a product transferred electronically, or
             921      services are:
             922          (A) sold;
             923          (B) leased; or
             924          (C) rented.
             925          (b) "Purchase price" and "sales price" include:
             926          (i) the seller's cost of the tangible personal property, a product transferred


             927      electronically, or services sold;
             928          (ii) expenses of the seller, including:
             929          (A) the cost of materials used;
             930          (B) a labor cost;
             931          (C) a service cost;
             932          (D) interest;
             933          (E) a loss;
             934          (F) the cost of transportation to the seller; or
             935          (G) a tax imposed on the seller;
             936          (iii) a charge by the seller for any service necessary to complete the sale; or
             937          (iv) consideration a seller receives from a person other than the purchaser if:
             938          (A) (I) the seller actually receives consideration from a person other than the purchaser;
             939      and
             940          (II) the consideration described in Subsection [(85)] (86)(b)(iv)(A)(I) is directly related
             941      to a price reduction or discount on the sale;
             942          (B) the seller has an obligation to pass the price reduction or discount through to the
             943      purchaser;
             944          (C) the amount of the consideration attributable to the sale is fixed and determinable by
             945      the seller at the time of the sale to the purchaser; and
             946          (D) (I) (Aa) the purchaser presents a certificate, coupon, or other documentation to the
             947      seller to claim a price reduction or discount; and
             948          (Bb) a person other than the seller authorizes, distributes, or grants the certificate,
             949      coupon, or other documentation with the understanding that the person other than the seller
             950      will reimburse any seller to whom the certificate, coupon, or other documentation is presented;
             951          (II) the purchaser identifies that purchaser to the seller as a member of a group or
             952      organization allowed a price reduction or discount, except that a preferred customer card that is
             953      available to any patron of a seller does not constitute membership in a group or organization
             954      allowed a price reduction or discount; or
             955          (III) the price reduction or discount is identified as a third party price reduction or
             956      discount on the:
             957          (Aa) invoice the purchaser receives; or


             958          (Bb) certificate, coupon, or other documentation the purchaser presents.
             959          (c) "Purchase price" and "sales price" do not include:
             960          (i) a discount:
             961          (A) in a form including:
             962          (I) cash;
             963          (II) term; or
             964          (III) coupon;
             965          (B) that is allowed by a seller;
             966          (C) taken by a purchaser on a sale; and
             967          (D) that is not reimbursed by a third party; or
             968          (ii) the following if separately stated on an invoice, bill of sale, or similar document
             969      provided to the purchaser:
             970          (A) the following from credit extended on the sale of tangible personal property or
             971      services:
             972          (I) a carrying charge;
             973          (II) a financing charge; or
             974          (III) an interest charge;
             975          (B) a delivery charge;
             976          (C) an installation charge;
             977          (D) a manufacturer rebate on a motor vehicle; or
             978          (E) a tax or fee legally imposed directly on the consumer.
             979          [(86)] (87) "Purchaser" means a person to whom:
             980          (a) a sale of tangible personal property is made;
             981          (b) a product is transferred electronically; or
             982          (c) a service is furnished.
             983          [(87)] (88) "Regularly rented" means:
             984          (a) rented to a guest for value three or more times during a calendar year; or
             985          (b) advertised or held out to the public as a place that is regularly rented to guests for
             986      value.
             987          [(88)] (89) "Renewable energy" means:
             988          (a) biomass energy;


             989          (b) hydroelectric energy;
             990          (c) geothermal energy;
             991          (d) solar energy; or
             992          (e) wind energy.
             993          [(89)] (90) (a) "Renewable energy production facility" means a facility that:
             994          (i) uses renewable energy to produce electricity; and
             995          (ii) has a production capacity of 20 kilowatts or greater.
             996          (b) A facility is a renewable energy production facility regardless of whether the
             997      facility is:
             998          (i) connected to an electric grid; or
             999          (ii) located on the premises of an electricity consumer.
             1000          [(90)] (91) "Rental" is as defined in Subsection [(50)] (51).
             1001          [(91)] (92) "Repairs or renovations of tangible personal property" means:
             1002          (a) a repair or renovation of tangible personal property that is not permanently attached
             1003      to real property; or
             1004          (b) attaching tangible personal property or a product that is transferred electronically to
             1005      other tangible personal property if the other tangible personal property to which the tangible
             1006      personal property or product that is transferred electronically is attached is not permanently
             1007      attached to real property.
             1008          [(92)] (93) "Research and development" means the process of inquiry or
             1009      experimentation aimed at the discovery of facts, devices, technologies, or applications and the
             1010      process of preparing those devices, technologies, or applications for marketing.
             1011          [(93)] (94) (a) "Residential telecommunications services" means a telecommunications
             1012      service or an ancillary service that is provided to an individual for personal use:
             1013          (i) at a residential address; or
             1014          (ii) at an institution, including a nursing home or a school, if the telecommunications
             1015      service or ancillary service is provided to and paid for by the individual residing at the
             1016      institution rather than the institution.
             1017          (b) For purposes of Subsection [(93)] (94)(a), a residential address includes an:
             1018          (i) apartment; or
             1019          (ii) other individual dwelling unit.


             1020          [(94)] (95) "Residential use" means the use in or around a home, apartment building,
             1021      sleeping quarters, and similar facilities or accommodations.
             1022          [(95)] (96) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose
             1023      other than:
             1024          (a) resale;
             1025          (b) sublease; or
             1026          (c) subrent.
             1027          [(96)] (97) (a) "Retailer" means any person engaged in a regularly organized business
             1028      in tangible personal property or any other taxable transaction under Subsection 59-12-103 (1),
             1029      and who is selling to the user or consumer and not for resale.
             1030          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             1031      engaged in the business of selling to users or consumers within the state.
             1032          [(97)] (98) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             1033      otherwise, in any manner, of tangible personal property or any other taxable transaction under
             1034      Subsection 59-12-103 (1), for consideration.
             1035          (b) "Sale" includes:
             1036          (i) installment and credit sales;
             1037          (ii) any closed transaction constituting a sale;
             1038          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
             1039      chapter;
             1040          (iv) any transaction if the possession of property is transferred but the seller retains the
             1041      title as security for the payment of the price; and
             1042          (v) any transaction under which right to possession, operation, or use of any article of
             1043      tangible personal property is granted under a lease or contract and the transfer of possession
             1044      would be taxable if an outright sale were made.
             1045          [(98)] (99) "Sale at retail" is as defined in Subsection [(95)] (96).
             1046          [(99)] (100) "Sale-leaseback transaction" means a transaction by which title to tangible
             1047      personal property or a product transferred electronically that is subject to a tax under this
             1048      chapter is transferred:
             1049          (a) by a purchaser-lessee;
             1050          (b) to a lessor;


             1051          (c) for consideration; and
             1052          (d) if:
             1053          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             1054      of the tangible personal property or product transferred electronically;
             1055          (ii) the sale of the tangible personal property or product transferred electronically to the
             1056      lessor is intended as a form of financing:
             1057          (A) for the tangible personal property or product transferred electronically; and
             1058          (B) to the purchaser-lessee; and
             1059          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             1060      is required to:
             1061          (A) capitalize the tangible personal property or product transferred electronically for
             1062      financial reporting purposes; and
             1063          (B) account for the lease payments as payments made under a financing arrangement.
             1064          [(100)] (101) "Sales price" is as defined in Subsection [(85)] (86).
             1065          [(101)] (102) (a) "Sales relating to schools" means the following sales by, amounts
             1066      paid to, or amounts charged by a school:
             1067          (i) sales that are directly related to the school's educational functions or activities
             1068      including:
             1069          (A) the sale of:
             1070          (I) textbooks;
             1071          (II) textbook fees;
             1072          (III) laboratory fees;
             1073          (IV) laboratory supplies; or
             1074          (V) safety equipment;
             1075          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             1076      that:
             1077          (I) a student is specifically required to wear as a condition of participation in a
             1078      school-related event or school-related activity; and
             1079          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             1080      place of ordinary clothing;
             1081          (C) sales of the following if the net or gross revenues generated by the sales are


             1082      deposited into a school district fund or school fund dedicated to school meals:
             1083          (I) food and food ingredients; or
             1084          (II) prepared food; or
             1085          (D) transportation charges for official school activities; or
             1086          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             1087      event or school-related activity.
             1088          (b) "Sales relating to schools" does not include:
             1089          (i) bookstore sales of items that are not educational materials or supplies;
             1090          (ii) except as provided in Subsection [(101)] (102)(a)(i)(B):
             1091          (A) clothing;
             1092          (B) clothing accessories or equipment;
             1093          (C) protective equipment; or
             1094          (D) sports or recreational equipment; or
             1095          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             1096      event or school-related activity if the amounts paid or charged are passed through to a person:
             1097          (A) other than a:
             1098          (I) school;
             1099          (II) nonprofit organization authorized by a school board or a governing body of a
             1100      private school to organize and direct a competitive secondary school activity; or
             1101          (III) nonprofit association authorized by a school board or a governing body of a
             1102      private school to organize and direct a competitive secondary school activity; and
             1103          (B) that is required to collect sales and use taxes under this chapter.
             1104          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1105      commission may make rules defining the term "passed through."
             1106          [(102)] (103) For purposes of this section and Section 59-12-104 , "school":
             1107          (a) means:
             1108          (i) an elementary school or a secondary school that:
             1109          (A) is a:
             1110          (I) public school; or
             1111          (II) private school; and
             1112          (B) provides instruction for one or more grades kindergarten through 12; or


             1113          (ii) a public school district; and
             1114          (b) includes the Electronic High School as defined in Section 53A-15-1002 .
             1115          [(103)] (104) "Seller" means a person that makes a sale, lease, or rental of:
             1116          (a) tangible personal property;
             1117          (b) a product transferred electronically; or
             1118          (c) a service.
             1119          [(104)] (105) (a) "Semiconductor fabricating, processing, research, or development
             1120      materials" means tangible personal property or a product transferred electronically if the
             1121      tangible personal property or product transferred electronically is:
             1122          (i) used primarily in the process of:
             1123          (A) (I) manufacturing a semiconductor;
             1124          (II) fabricating a semiconductor; or
             1125          (III) research or development of a:
             1126          (Aa) semiconductor; or
             1127          (Bb) semiconductor manufacturing process; or
             1128          (B) maintaining an environment suitable for a semiconductor; or
             1129          (ii) consumed primarily in the process of:
             1130          (A) (I) manufacturing a semiconductor;
             1131          (II) fabricating a semiconductor; or
             1132          (III) research or development of a:
             1133          (Aa) semiconductor; or
             1134          (Bb) semiconductor manufacturing process; or
             1135          (B) maintaining an environment suitable for a semiconductor.
             1136          (b) "Semiconductor fabricating, processing, research, or development materials"
             1137      includes:
             1138          (i) parts used in the repairs or renovations of tangible personal property or a product
             1139      transferred electronically described in Subsection [(104)] (105)(a); or
             1140          (ii) a chemical, catalyst, or other material used to:
             1141          (A) produce or induce in a semiconductor a:
             1142          (I) chemical change; or
             1143          (II) physical change;


             1144          (B) remove impurities from a semiconductor; or
             1145          (C) improve the marketable condition of a semiconductor.
             1146          [(105)] (106) "Senior citizen center" means a facility having the primary purpose of
             1147      providing services to the aged as defined in Section 62A-3-101 .
             1148          [(106)] (107) "Simplified electronic return" means the electronic return:
             1149          (a) described in Section 318(C) of the agreement; and
             1150          (b) approved by the governing board of the agreement.
             1151          [(107)] (108) "Solar energy" means the sun used as the sole source of energy for
             1152      producing electricity.
             1153          [(108)] (109) (a) "Sports or recreational equipment" means an item:
             1154          (i) designed for human use; and
             1155          (ii) that is:
             1156          (A) worn in conjunction with:
             1157          (I) an athletic activity; or
             1158          (II) a recreational activity; and
             1159          (B) not suitable for general use.
             1160          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1161      commission shall make rules:
             1162          (i) listing the items that constitute "sports or recreational equipment"; and
             1163          (ii) that are consistent with the list of items that constitute "sports or recreational
             1164      equipment" under the agreement.
             1165          [(109)] (110) "State" means the state of Utah, its departments, and agencies.
             1166          [(110)] (111) "Storage" means any keeping or retention of tangible personal property or
             1167      any other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose
             1168      except sale in the regular course of business.
             1169          [(111)] (112) (a) Except as provided in Subsection [(111)] (112)(d) or (e), "tangible
             1170      personal property" means personal property that:
             1171          (i) may be:
             1172          (A) seen;
             1173          (B) weighed;
             1174          (C) measured;


             1175          (D) felt; or
             1176          (E) touched; or
             1177          (ii) is in any manner perceptible to the senses.
             1178          (b) "Tangible personal property" includes:
             1179          (i) electricity;
             1180          (ii) water;
             1181          (iii) gas;
             1182          (iv) steam; or
             1183          (v) prewritten computer software.
             1184          (c) "Tangible personal property" includes the following regardless of whether the item
             1185      is attached to real property:
             1186          (i) a dishwasher;
             1187          (ii) a dryer;
             1188          (iii) a freezer;
             1189          (iv) a microwave;
             1190          (v) a refrigerator;
             1191          (vi) a stove;
             1192          (vii) a washer; or
             1193          (viii) an item similar to Subsections [(111)] (112)(c)(i) through (vii) as determined by
             1194      the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1195      Rulemaking Act.
             1196          (d) "Tangible personal property" does not include a product that is transferred
             1197      electronically.
             1198          (e) "Tangible personal property" does not include the following if attached to real
             1199      property, regardless of whether the attachment to real property is only through a line that
             1200      supplies water, electricity, gas, telephone, cable, or supplies a similar item as determined by the
             1201      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1202      Rulemaking Act:
             1203          (i) a hot water heater;
             1204          (ii) a water filtration system; or
             1205          (iii) a water softener system.


             1206          [(112)] (113) "Tar sands" means impregnated sands that yield mixtures of liquid
             1207      hydrocarbon and require further processing other than mechanical blending before becoming
             1208      finished petroleum products.
             1209          [(113)] (114) (a) "Telecommunications enabling or facilitating equipment, machinery,
             1210      or software" means an item listed in Subsection [(113)] (114)(b) if that item is purchased or
             1211      leased primarily to enable or facilitate one or more of the following to function:
             1212          (i) telecommunications switching or routing equipment, machinery, or software; or
             1213          (ii) telecommunications transmission equipment, machinery, or software.
             1214          (b) The following apply to Subsection [(113)] (114)(a):
             1215          (i) a pole;
             1216          (ii) software;
             1217          (iii) a supplementary power supply;
             1218          (iv) temperature or environmental equipment or machinery;
             1219          (v) test equipment;
             1220          (vi) a tower; or
             1221          (vii) equipment, machinery, or software that functions similarly to an item listed in
             1222      Subsections [(113)] (114)(b)(i) through (vi) as determined by the commission by rule made in
             1223      accordance with Subsection [(113)] (114)(c).
             1224          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1225      commission may by rule define what constitutes equipment, machinery, or software that
             1226      functions similarly to an item listed in Subsections [(113)] (114)(b)(i) through (vi).
             1227          [(114)] (115) "Telecommunications equipment, machinery, or software required for
             1228      911 service" means equipment, machinery, or software that is required to comply with 47
             1229      C.F.R. Sec. 20.18.
             1230          [(115)] (116) "Telecommunications maintenance or repair equipment, machinery, or
             1231      software" means equipment, machinery, or software purchased or leased primarily to maintain
             1232      or repair one or more of the following, regardless of whether the equipment, machinery, or
             1233      software is purchased or leased as a spare part or as an upgrade or modification to one or more
             1234      of the following:
             1235          (a) telecommunications enabling or facilitating equipment, machinery, or software;
             1236          (b) telecommunications switching or routing equipment, machinery, or software; or


             1237          (c) telecommunications transmission equipment, machinery, or software.
             1238          [(116)] (117) (a) "Telecommunications service" means the electronic conveyance,
             1239      routing, or transmission of audio, data, video, voice, or any other information or signal to a
             1240      point, or among or between points.
             1241          (b) "Telecommunications service" includes:
             1242          (i) an electronic conveyance, routing, or transmission with respect to which a computer
             1243      processing application is used to act:
             1244          (A) on the code, form, or protocol of the content;
             1245          (B) for the purpose of electronic conveyance, routing, or transmission; and
             1246          (C) regardless of whether the service:
             1247          (I) is referred to as voice over Internet protocol service; or
             1248          (II) is classified by the Federal Communications Commission as enhanced or value
             1249      added;
             1250          (ii) an 800 service;
             1251          (iii) a 900 service;
             1252          (iv) a fixed wireless service;
             1253          (v) a mobile wireless service;
             1254          (vi) a postpaid calling service;
             1255          (vii) a prepaid calling service;
             1256          (viii) a prepaid wireless calling service; or
             1257          (ix) a private communications service.
             1258          (c) "Telecommunications service" does not include:
             1259          (i) advertising, including directory advertising;
             1260          (ii) an ancillary service;
             1261          (iii) a billing and collection service provided to a third party;
             1262          (iv) a data processing and information service if:
             1263          (A) the data processing and information service allows data to be:
             1264          (I) (Aa) acquired;
             1265          (Bb) generated;
             1266          (Cc) processed;
             1267          (Dd) retrieved; or


             1268          (Ee) stored; and
             1269          (II) delivered by an electronic transmission to a purchaser; and
             1270          (B) the purchaser's primary purpose for the underlying transaction is the processed data
             1271      or information;
             1272          (v) installation or maintenance of the following on a customer's premises:
             1273          (A) equipment; or
             1274          (B) wiring;
             1275          (vi) Internet access service;
             1276          (vii) a paging service;
             1277          (viii) a product transferred electronically, including:
             1278          (A) music;
             1279          (B) reading material;
             1280          (C) a ring tone;
             1281          (D) software; or
             1282          (E) video;
             1283          (ix) a radio and television audio and video programming service:
             1284          (A) regardless of the medium; and
             1285          (B) including:
             1286          (I) furnishing conveyance, routing, or transmission of a television audio and video
             1287      programming service by a programming service provider;
             1288          (II) cable service as defined in 47 U.S.C. Sec. 522(6); or
             1289          (III) audio and video programming services delivered by a commercial mobile radio
             1290      service provider as defined in 47 C.F.R. Sec. 20.3;
             1291          (x) a value-added nonvoice data service; or
             1292          (xi) tangible personal property.
             1293          [(117)] (118) (a) "Telecommunications service provider" means a person that:
             1294          (i) owns, controls, operates, or manages a telecommunications service; and
             1295          (ii) engages in an activity described in Subsection [(117)] (118)(a)(i) for the shared use
             1296      with or resale to any person of the telecommunications service.
             1297          (b) A person described in Subsection [(117)] (118)(a) is a telecommunications service
             1298      provider whether or not the Public Service Commission of Utah regulates:


             1299          (i) that person; or
             1300          (ii) the telecommunications service that the person owns, controls, operates, or
             1301      manages.
             1302          [(118)] (119) (a) "Telecommunications switching or routing equipment, machinery, or
             1303      software" means an item listed in Subsection [(118)] (119)(b) if that item is purchased or
             1304      leased primarily for switching or routing:
             1305          (i) an ancillary service;
             1306          (ii) data communications;
             1307          (iii) voice communications; or
             1308          (iv) telecommunications service.
             1309          (b) The following apply to Subsection [(118)] (119)(a):
             1310          (i) a bridge;
             1311          (ii) a computer;
             1312          (iii) a cross connect;
             1313          (iv) a modem;
             1314          (v) a multiplexer;
             1315          (vi) plug in circuitry;
             1316          (vii) a router;
             1317          (viii) software;
             1318          (ix) a switch; or
             1319          (x) equipment, machinery, or software that functions similarly to an item listed in
             1320      Subsections [(118)] (119)(b)(i) through (ix) as determined by the commission by rule made in
             1321      accordance with Subsection [(118)] (119)(c).
             1322          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1323      commission may by rule define what constitutes equipment, machinery, or software that
             1324      functions similarly to an item listed in Subsections [(118)] (119)(b)(i) through (ix).
             1325          [(119)] (120) (a) "Telecommunications transmission equipment, machinery, or
             1326      software" means an item listed in Subsection [(119)] (120)(b) if that item is purchased or
             1327      leased primarily for sending, receiving, or transporting:
             1328          (i) an ancillary service;
             1329          (ii) data communications;


             1330          (iii) voice communications; or
             1331          (iv) telecommunications service.
             1332          (b) The following apply to Subsection [(119)] (120)(a):
             1333          (i) an amplifier;
             1334          (ii) a cable;
             1335          (iii) a closure;
             1336          (iv) a conduit;
             1337          (v) a controller;
             1338          (vi) a duplexer;
             1339          (vii) a filter;
             1340          (viii) an input device;
             1341          (ix) an input/output device;
             1342          (x) an insulator;
             1343          (xi) microwave machinery or equipment;
             1344          (xii) an oscillator;
             1345          (xiii) an output device;
             1346          (xiv) a pedestal;
             1347          (xv) a power converter;
             1348          (xvi) a power supply;
             1349          (xvii) a radio channel;
             1350          (xviii) a radio receiver;
             1351          (xix) a radio transmitter;
             1352          (xx) a repeater;
             1353          (xxi) software;
             1354          (xxii) a terminal;
             1355          (xxiii) a timing unit;
             1356          (xxiv) a transformer;
             1357          (xxv) a wire; or
             1358          (xxvi) equipment, machinery, or software that functions similarly to an item listed in
             1359      Subsections [(119)] (120)(b)(i) through (xxv) as determined by the commission by rule made in
             1360      accordance with Subsection [(119)] (120)(c).


             1361          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1362      commission may by rule define what constitutes equipment, machinery, or software that
             1363      functions similarly to an item listed in Subsections [(119)] (120)(b)(i) through (xxv).
             1364          (121) (a) "Textbook for a higher education course" means a textbook or other printed
             1365      material that is required for a course:
             1366          (i) offered by an institution of higher education; and

             1367          (ii) that the purchaser of the textbook or other printed material attends or will attend.
             1368          (b) "Textbook for a higher education course" includes a textbook in electronic format.
             1369          [(120)] (122) "Tobacco" means:
             1370          (a) a cigarette;
             1371          (b) a cigar;
             1372          (c) chewing tobacco;
             1373          (d) pipe tobacco; or
             1374          (e) any other item that contains tobacco.
             1375          [(121)] (123) "Unassisted amusement device" means an amusement device, skill
             1376      device, or ride device that is started and stopped by the purchaser or renter of the right to use or
             1377      operate the amusement device, skill device, or ride device.
             1378          [(122)] (124) (a) "Use" means the exercise of any right or power over tangible personal
             1379      property, a product transferred electronically, or a service under Subsection 59-12-103 (1),
             1380      incident to the ownership or the leasing of that tangible personal property, product transferred
             1381      electronically, or service.
             1382          (b) "Use" does not include the sale, display, demonstration, or trial of tangible personal
             1383      property, a product transferred electronically, or a service in the regular course of business and
             1384      held for resale.
             1385          [(123)] (125) "Value-added nonvoice data service" means a service:
             1386          (a) that otherwise meets the definition of a telecommunications service except that a
             1387      computer processing application is used to act primarily for a purpose other than conveyance,
             1388      routing, or transmission; and
             1389          (b) with respect to which a computer processing application is used to act on data or
             1390      information:


             1391          (i) code;
             1392          (ii) content;
             1393          (iii) form; or
             1394          (iv) protocol.
             1395          [(124)] (126) (a) Subject to Subsection [(124)] (126)(b), "vehicle" means the following
             1396      that are required to be titled, registered, or titled and registered:
             1397          (i) an aircraft as defined in Section 72-10-102 ;
             1398          (ii) a vehicle as defined in Section 41-1a-102 ;
             1399          (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
             1400          (iv) a vessel as defined in Section 41-1a-102 .
             1401          (b) For purposes of Subsection 59-12-104 (33) only, "vehicle" includes:
             1402          (i) a vehicle described in Subsection [(124)] (126)(a); or
             1403          (ii) (A) a locomotive;
             1404          (B) a freight car;
             1405          (C) railroad work equipment; or
             1406          (D) other railroad rolling stock.
             1407          [(125)] (127) "Vehicle dealer" means a person engaged in the business of buying,
             1408      selling, or exchanging a vehicle as defined in Subsection [(124)] (126).
             1409          [(126)] (128) (a) "Vertical service" means an ancillary service that:
             1410          (i) is offered in connection with one or more telecommunications services; and
             1411          (ii) offers an advanced calling feature that allows a customer to:
             1412          (A) identify a caller; and
             1413          (B) manage multiple calls and call connections.
             1414          (b) "Vertical service" includes an ancillary service that allows a customer to manage a
             1415      conference bridging service.
             1416          [(127)] (129) (a) "Voice mail service" means an ancillary service that enables a
             1417      customer to receive, send, or store a recorded message.
             1418          (b) "Voice mail service" does not include a vertical service that a customer is required
             1419      to have in order to utilize a voice mail service.
             1420          [(128)] (130) (a) Except as provided in Subsection [(128)] (130)(b), "waste energy
             1421      facility" means a facility that generates electricity:


             1422          (i) using as the primary source of energy waste materials that would be placed in a
             1423      landfill or refuse pit if it were not used to generate electricity, including:
             1424          (A) tires;
             1425          (B) waste coal; or
             1426          (C) oil shale; and
             1427          (ii) in amounts greater than actually required for the operation of the facility.
             1428          (b) "Waste energy facility" does not include a facility that incinerates:
             1429          (i) municipal solid waste;
             1430          (ii) hospital waste as defined in 40 C.F.R. 60.51c; or
             1431          (iii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
             1432          [(129)] (131) "Watercraft" means a vessel as defined in Section 73-18-2 .
             1433          [(130)] (132) "Wind energy" means wind used as the sole source of energy to produce
             1434      electricity.
             1435          [(131)] (133) "ZIP Code" means a Zoning Improvement Plan Code assigned to a
             1436      geographic location by the United States Postal Service.
             1437          Section 2. Section 59-12-104 is amended to read:
             1438           59-12-104. Exemptions.
             1439          The following sales and uses are exempt from the taxes imposed by this chapter:
             1440          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             1441      under Chapter 13, Motor and Special Fuel Tax Act;
             1442          (2) sales to the state, its institutions, and its political subdivisions; however, this
             1443      exemption does not apply to sales of:
             1444          (a) construction materials except:
             1445          (i) construction materials purchased by or on behalf of institutions of the public
             1446      education system as defined in Utah Constitution Article X, Section 2, provided the
             1447      construction materials are clearly identified and segregated and installed or converted to real
             1448      property which is owned by institutions of the public education system; and
             1449          (ii) construction materials purchased by the state, its institutions, or its political
             1450      subdivisions which are installed or converted to real property by employees of the state, its
             1451      institutions, or its political subdivisions; or
             1452          (b) tangible personal property in connection with the construction, operation,


             1453      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             1454      providing additional project capacity, as defined in Section 11-13-103 ;
             1455          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             1456          (i) the proceeds of each sale do not exceed $1; and
             1457          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             1458      the cost of the item described in Subsection (3)(b) as goods consumed; and
             1459          (b) Subsection (3)(a) applies to:
             1460          (i) food and food ingredients; or
             1461          (ii) prepared food;
             1462          (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
             1463          (i) alcoholic beverages;
             1464          (ii) food and food ingredients; or
             1465          (iii) prepared food;
             1466          (b) sales of tangible personal property or a product transferred electronically:
             1467          (i) to a passenger;
             1468          (ii) by a commercial airline carrier; and
             1469          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
             1470          (c) services related to Subsection (4)(a) or (b);
             1471          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
             1472      and equipment:
             1473          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
             1474      North American Industry Classification System of the federal Executive Office of the
             1475      President, Office of Management and Budget; and
             1476          (II) for:
             1477          (Aa) installation in an aircraft, including services relating to the installation of parts or
             1478      equipment in the aircraft;
             1479          (Bb) renovation of an aircraft; or
             1480          (Cc) repair of an aircraft; or
             1481          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
             1482      commerce; or
             1483          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an


             1484      aircraft operated by a common carrier in interstate or foreign commerce; and
             1485          (b) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             1486      a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
             1487      refund:
             1488          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
             1489          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
             1490          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
             1491      the sale prior to filing for the refund;
             1492          (iv) for sales and use taxes paid under this chapter on the sale;
             1493          (v) in accordance with Section 59-1-1410 ; and
             1494          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             1495      the person files for the refund on or before September 30, 2011;
             1496          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             1497      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             1498      exhibitor, distributor, or commercial television or radio broadcaster;
             1499          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             1500      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             1501      washing of tangible personal property;
             1502          (b) if a seller that sells at the same business location assisted cleaning or washing of
             1503      tangible personal property and cleaning or washing of tangible personal property that is not
             1504      assisted cleaning or washing of tangible personal property, the exemption described in
             1505      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             1506      or washing of the tangible personal property; and
             1507          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
             1508      Utah Administrative Rulemaking Act, the commission may make rules:
             1509          (i) governing the circumstances under which sales are at the same business location;
             1510      and
             1511          (ii) establishing the procedures and requirements for a seller to separately account for
             1512      sales of assisted cleaning or washing of tangible personal property;
             1513          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             1514      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are


             1515      fulfilled;
             1516          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             1517      this state if the vehicle is:
             1518          (a) not registered in this state; and
             1519          (b) (i) not used in this state; or
             1520          (ii) used in this state:
             1521          (A) if the vehicle is not used to conduct business, for a time period that does not
             1522      exceed the longer of:
             1523          (I) 30 days in any calendar year; or
             1524          (II) the time period necessary to transport the vehicle to the borders of this state; or
             1525          (B) if the vehicle is used to conduct business, for the time period necessary to transport
             1526      the vehicle to the borders of this state;
             1527          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             1528          (i) the item is intended for human use; and
             1529          (ii) (A) a prescription was issued for the item; or
             1530          (B) the item was purchased by a hospital or other medical facility; and
             1531          (b) (i) Subsection (10)(a) applies to:
             1532          (A) a drug;
             1533          (B) a syringe; or
             1534          (C) a stoma supply; and
             1535          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1536      commission may by rule define the terms:
             1537          (A) "syringe"; or
             1538          (B) "stoma supply";
             1539          (11) sales or use of property, materials, or services used in the construction of or
             1540      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             1541          (12) (a) sales of an item described in Subsection (12)(c) served by:
             1542          (i) the following if the item described in Subsection (12)(c) is not available to the
             1543      general public:
             1544          (A) a church; or
             1545          (B) a charitable institution;


             1546          (ii) an institution of higher education if:
             1547          (A) the item described in Subsection (12)(c) is not available to the general public; or
             1548          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             1549      offered by the institution of higher education; or
             1550          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             1551          (i) a medical facility; or
             1552          (ii) a nursing facility; and
             1553          (c) Subsections (12)(a) and (b) apply to:
             1554          (i) food and food ingredients;
             1555          (ii) prepared food; or
             1556          (iii) alcoholic beverages;
             1557          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             1558      or a product transferred electronically by a person:
             1559          (i) regardless of the number of transactions involving the sale of that tangible personal
             1560      property or product transferred electronically by that person; and
             1561          (ii) not regularly engaged in the business of selling that type of tangible personal
             1562      property or product transferred electronically;
             1563          (b) this Subsection (13) does not apply if:
             1564          (i) the sale is one of a series of sales of a character to indicate that the person is
             1565      regularly engaged in the business of selling that type of tangible personal property or product
             1566      transferred electronically;
             1567          (ii) the person holds that person out as regularly engaged in the business of selling that
             1568      type of tangible personal property or product transferred electronically;
             1569          (iii) the person sells an item of tangible personal property or product transferred
             1570      electronically that the person purchased as a sale that is exempt under Subsection (25); or
             1571          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             1572      this state in which case the tax is based upon:
             1573          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             1574      sold; or
             1575          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             1576      value of the vehicle or vessel being sold at the time of the sale as determined by the


             1577      commission; and
             1578          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1579      commission shall make rules establishing the circumstances under which:
             1580          (i) a person is regularly engaged in the business of selling a type of tangible personal
             1581      property or product transferred electronically;
             1582          (ii) a sale of tangible personal property or a product transferred electronically is one of
             1583      a series of sales of a character to indicate that a person is regularly engaged in the business of
             1584      selling that type of tangible personal property or product transferred electronically; or
             1585          (iii) a person holds that person out as regularly engaged in the business of selling a type
             1586      of tangible personal property or product transferred electronically;
             1587          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             1588      July 1, 2006, for a purchase or lease by a manufacturing facility except for a cogeneration
             1589      facility, of the following:
             1590          (i) machinery and equipment that:
             1591          (A) are used:
             1592          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             1593      recycler described in Subsection 59-12-102 [(54)](55)(b):
             1594          (Aa) in the manufacturing process;
             1595          (Bb) to manufacture an item sold as tangible personal property; and
             1596          (Cc) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             1597      (14)(a)(i)(A)(I) in the state; or
             1598          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             1599      59-12-102 [(54)](55)(b):
             1600          (Aa) to process an item sold as tangible personal property; and
             1601          (Bb) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             1602      (14)(a)(i)(A)(II) in the state; and
             1603          (B) have an economic life of three or more years; and
             1604          (ii) normal operating repair or replacement parts that:
             1605          (A) have an economic life of three or more years; and
             1606          (B) are used:
             1607          (I) for a manufacturing facility except for a manufacturing facility that is a scrap


             1608      recycler described in Subsection 59-12-102 [(54)](55)(b):
             1609          (Aa) in the manufacturing process; and
             1610          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(I) in the
             1611      state; or
             1612          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             1613      59-12-102 [(54)](55)(b):
             1614          (Aa) to process an item sold as tangible personal property; and
             1615          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(II) in the
             1616      state;
             1617          (b) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             1618      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             1619      of the following:
             1620          (i) machinery and equipment that:
             1621          (A) are used:
             1622          (I) in the manufacturing process;
             1623          (II) to manufacture an item sold as tangible personal property; and
             1624          (III) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             1625      (14)(b) in the state; and
             1626          (B) have an economic life of three or more years; and
             1627          (ii) normal operating repair or replacement parts that:
             1628          (A) are used:
             1629          (I) in the manufacturing process; and
             1630          (II) in a manufacturing facility described in this Subsection (14)(b) in the state; and
             1631          (B) have an economic life of three or more years;
             1632          (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
             1633      by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
             1634      NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
             1635      Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
             1636      of the 2002 North American Industry Classification System of the federal Executive Office of
             1637      the President, Office of Management and Budget, of the following:
             1638          (i) machinery and equipment that:


             1639          (A) are used:
             1640          (I) (Aa) in the production process, other than the production of real property; or
             1641          (Bb) in research and development; and
             1642          (II) beginning on July 1, 2009, in an establishment described in this Subsection (14)(c)
             1643      in the state; and
             1644          (B) have an economic life of three or more years; and
             1645          (ii) normal operating repair or replacement parts that:
             1646          (A) have an economic life of three or more years; and
             1647          (B) are used in:
             1648          (I) (Aa) the production process, except for the production of real property; and
             1649          (Bb) an establishment described in this Subsection (14)(c) in the state; or
             1650          (II) (Aa) research and development; and
             1651          (Bb) in an establishment described in this Subsection (14)(c) in the state;
             1652          (d) (i) amounts paid or charged for a purchase or lease made on or after July 1, 2010,
             1653      but on or before June 30, 2014, by an establishment described in NAICS Code 518112, Web
             1654      Search Portals, of the 2002 North American Industry Classification System of the federal
             1655      Executive Office of the President, Office of Management and Budget, of the following:
             1656          (A) machinery and equipment that:
             1657          (I) are used in the operation of the web search portal;
             1658          (II) have an economic life of three or more years; and
             1659          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             1660      in the state; and
             1661          (B) normal operating repair or replacement parts that:
             1662          (I) are used in the operation of the web search portal;
             1663          (II) have an economic life of three or more years; and
             1664          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             1665      in the state; or
             1666          (ii) amounts paid or charged for a purchase or lease made on or after July 1, 2014, by
             1667      an establishment described in NAICS Code 518112, Web Search Portals, of the 2002 North
             1668      American Industry Classification System of the federal Executive Office of the President,
             1669      Office of Management and Budget, of the following:


             1670          (A) machinery and equipment that:
             1671          (I) are used in the operation of the web search portal; and
             1672          (II) have an economic life of three or more years; and
             1673          (B) normal operating repair or replacement parts that:
             1674          (I) are used in the operation of the web search portal; and
             1675          (II) have an economic life of three or more years;
             1676          (e) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
             1677      Utah Administrative Rulemaking Act, the commission:
             1678          (i) shall by rule define the term "establishment"; and
             1679          (ii) may by rule define what constitutes:
             1680          (A) processing an item sold as tangible personal property;
             1681          (B) the production process, except for the production of real property;
             1682          (C) research and development; or
             1683          (D) a new or expanding establishment described in Subsection (14)(d) in the state; and
             1684          (f) on or before October 1, 2011, and every five years after October 1, 2011, the
             1685      commission shall:
             1686          (i) review the exemptions described in this Subsection (14) and make
             1687      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             1688      exemptions should be continued, modified, or repealed; and
             1689          (ii) include in its report:
             1690          (A) an estimate of the cost of the exemptions;
             1691          (B) the purpose and effectiveness of the exemptions; and
             1692          (C) the benefits of the exemptions to the state;
             1693          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             1694          (i) tooling;
             1695          (ii) special tooling;
             1696          (iii) support equipment;
             1697          (iv) special test equipment; or
             1698          (v) parts used in the repairs or renovations of tooling or equipment described in
             1699      Subsections (15)(a)(i) through (iv); and
             1700          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:


             1701          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             1702      performance of any aerospace or electronics industry contract with the United States
             1703      government or any subcontract under that contract; and
             1704          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             1705      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             1706      by:
             1707          (A) a government identification tag placed on the tooling, equipment, or parts; or
             1708          (B) listing on a government-approved property record if placing a government
             1709      identification tag on the tooling, equipment, or parts is impractical;
             1710          (16) sales of newspapers or newspaper subscriptions;
             1711          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
             1712      product transferred electronically traded in as full or part payment of the purchase price, except
             1713      that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
             1714      trade-ins are limited to other vehicles only, and the tax is based upon:
             1715          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             1716      vehicle being traded in; or
             1717          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             1718      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             1719      commission; and
             1720          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             1721      following items of tangible personal property or products transferred electronically traded in as
             1722      full or part payment of the purchase price:
             1723          (i) money;
             1724          (ii) electricity;
             1725          (iii) water;
             1726          (iv) gas; or
             1727          (v) steam;
             1728          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             1729      or a product transferred electronically used or consumed primarily and directly in farming
             1730      operations, regardless of whether the tangible personal property or product transferred
             1731      electronically:


             1732          (A) becomes part of real estate; or
             1733          (B) is installed by a:
             1734          (I) farmer;
             1735          (II) contractor; or
             1736          (III) subcontractor; or
             1737          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
             1738      product transferred electronically if the tangible personal property or product transferred
             1739      electronically is exempt under Subsection (18)(a)(i); and
             1740          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following are
             1741      subject to the taxes imposed by this chapter:
             1742          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
             1743      incidental to farming:
             1744          (I) machinery;
             1745          (II) equipment;
             1746          (III) materials; or
             1747          (IV) supplies; and
             1748          (B) tangible personal property that is considered to be used in a manner that is
             1749      incidental to farming includes:
             1750          (I) hand tools; or
             1751          (II) maintenance and janitorial equipment and supplies;
             1752          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
             1753      transferred electronically if the tangible personal property or product transferred electronically
             1754      is used in an activity other than farming; and
             1755          (B) tangible personal property or a product transferred electronically that is considered
             1756      to be used in an activity other than farming includes:
             1757          (I) office equipment and supplies; or
             1758          (II) equipment and supplies used in:
             1759          (Aa) the sale or distribution of farm products;
             1760          (Bb) research; or
             1761          (Cc) transportation; or
             1762          (iii) a vehicle required to be registered by the laws of this state during the period


             1763      ending two years after the date of the vehicle's purchase;
             1764          (19) sales of hay;
             1765          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             1766      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             1767      garden, farm, or other agricultural produce is sold by:
             1768          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             1769      agricultural produce;
             1770          (b) an employee of the producer described in Subsection (20)(a); or
             1771          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             1772          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             1773      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             1774          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             1775      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             1776      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             1777      manufacturer, processor, wholesaler, or retailer;
             1778          (23) a product stored in the state for resale;
             1779          (24) (a) purchases of a product if:
             1780          (i) the product is:
             1781          (A) purchased outside of this state;
             1782          (B) brought into this state:
             1783          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             1784          (II) by a nonresident person who is not living or working in this state at the time of the
             1785      purchase;
             1786          (C) used for the personal use or enjoyment of the nonresident person described in
             1787      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             1788          (D) not used in conducting business in this state; and
             1789          (ii) for:
             1790          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
             1791      the product for a purpose for which the product is designed occurs outside of this state;
             1792          (B) a boat, the boat is registered outside of this state; or
             1793          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered


             1794      outside of this state;
             1795          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             1796          (i) a lease or rental of a product; or
             1797          (ii) a sale of a vehicle exempt under Subsection (33); and
             1798          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             1799      purposes of Subsection (24)(a), the commission may by rule define what constitutes the
             1800      following:
             1801          (i) conducting business in this state if that phrase has the same meaning in this
             1802      Subsection (24) as in Subsection (63);
             1803          (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
             1804      as in Subsection (63); or
             1805          (iii) a purpose for which a product is designed if that phrase has the same meaning in
             1806      this Subsection (24) as in Subsection (63);
             1807          (25) a product purchased for resale in this state, in the regular course of business, either
             1808      in its original form or as an ingredient or component part of a manufactured or compounded
             1809      product;
             1810          (26) a product upon which a sales or use tax was paid to some other state, or one of its
             1811      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             1812      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             1813      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             1814      Act;
             1815          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             1816      person for use in compounding a service taxable under the subsections;
             1817          (28) purchases made in accordance with the special supplemental nutrition program for
             1818      women, infants, and children established in 42 U.S.C. Sec. 1786;
             1819          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             1820      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             1821      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             1822      Manual of the federal Executive Office of the President, Office of Management and Budget;
             1823          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             1824      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:


             1825          (a) not registered in this state; and
             1826          (b) (i) not used in this state; or
             1827          (ii) used in this state:
             1828          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
             1829      time period that does not exceed the longer of:
             1830          (I) 30 days in any calendar year; or
             1831          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             1832      the borders of this state; or
             1833          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             1834      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             1835      state;
             1836          (31) sales of aircraft manufactured in Utah;
             1837          (32) amounts paid for the purchase of telecommunications service for purposes of
             1838      providing telecommunications service;
             1839          (33) sales, leases, or uses of the following:
             1840          (a) a vehicle by an authorized carrier; or
             1841          (b) tangible personal property that is installed on a vehicle:
             1842          (i) sold or leased to or used by an authorized carrier; and
             1843          (ii) before the vehicle is placed in service for the first time;
             1844          (34) (a) 45% of the sales price of any new manufactured home; and
             1845          (b) 100% of the sales price of any used manufactured home;
             1846          (35) sales relating to schools and fundraising sales;
             1847          (36) sales or rentals of durable medical equipment if:
             1848          (a) a person presents a prescription for the durable medical equipment; and
             1849          (b) the durable medical equipment is used for home use only;
             1850          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             1851      Section 72-11-102 ; and
             1852          (b) the commission shall by rule determine the method for calculating sales exempt
             1853      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             1854          (38) sales to a ski resort of:
             1855          (a) snowmaking equipment;


             1856          (b) ski slope grooming equipment;
             1857          (c) passenger ropeways as defined in Section 72-11-102 ; or
             1858          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             1859      described in Subsections (38)(a) through (c);
             1860          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             1861          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             1862      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             1863      59-12-102 ;
             1864          (b) if a seller that sells or rents at the same business location the right to use or operate
             1865      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             1866      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             1867      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             1868      amusement, entertainment, or recreation for the assisted amusement devices; and
             1869          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
             1870      Utah Administrative Rulemaking Act, the commission may make rules:
             1871          (i) governing the circumstances under which sales are at the same business location;
             1872      and
             1873          (ii) establishing the procedures and requirements for a seller to separately account for
             1874      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
             1875      assisted amusement devices;
             1876          (41) (a) sales of photocopies by:
             1877          (i) a governmental entity; or
             1878          (ii) an entity within the state system of public education, including:
             1879          (A) a school; or
             1880          (B) the State Board of Education; or
             1881          (b) sales of publications by a governmental entity;
             1882          (42) amounts paid for admission to an athletic event at an institution of higher
             1883      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             1884      20 U.S.C. Sec. 1681 et seq.;
             1885          (43) (a) sales made to or by:
             1886          (i) an area agency on aging; or


             1887          (ii) a senior citizen center owned by a county, city, or town; or
             1888          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             1889          (44) sales or leases of semiconductor fabricating, processing, research, or development
             1890      materials regardless of whether the semiconductor fabricating, processing, research, or
             1891      development materials:
             1892          (a) actually come into contact with a semiconductor; or
             1893          (b) ultimately become incorporated into real property;
             1894          (45) an amount paid by or charged to a purchaser for accommodations and services
             1895      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             1896      59-12-104.2 ;
             1897          (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             1898      sports event registration certificate in accordance with Section 41-3-306 for the event period
             1899      specified on the temporary sports event registration certificate;
             1900          (47) sales or uses of electricity, if the sales or uses are:
             1901          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             1902      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             1903      source, as designated in the tariff by the Public Service Commission of Utah; and
             1904          (b) for an amount of electricity that is:
             1905          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             1906      under the tariff described in Subsection (47)(a); and
             1907          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             1908      Subsection (47)(a) that may be purchased under the tariff described in Subsection (47)(a);
             1909          (48) sales or rentals of mobility enhancing equipment if a person presents a
             1910      prescription for the mobility enhancing equipment;
             1911          (49) sales of water in a:
             1912          (a) pipe;
             1913          (b) conduit;
             1914          (c) ditch; or
             1915          (d) reservoir;
             1916          (50) sales of currency or coinage that constitute legal tender of the United States or of a
             1917      foreign nation;


             1918          (51) (a) sales of an item described in Subsection (51)(b) if the item:
             1919          (i) does not constitute legal tender of any nation; and
             1920          (ii) has a gold, silver, or platinum content of 80% or more; and
             1921          (b) Subsection (51)(a) applies to a gold, silver, or platinum:
             1922          (i) ingot;
             1923          (ii) bar;
             1924          (iii) medallion; or
             1925          (iv) decorative coin;
             1926          (52) amounts paid on a sale-leaseback transaction;
             1927          (53) sales of a prosthetic device:
             1928          (a) for use on or in a human; and
             1929          (b) (i) for which a prescription is required; or
             1930          (ii) if the prosthetic device is purchased by a hospital or other medical facility;
             1931          (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
             1932      machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
             1933      or equipment is primarily used in the production or postproduction of the following media for
             1934      commercial distribution:
             1935          (i) a motion picture;
             1936          (ii) a television program;
             1937          (iii) a movie made for television;
             1938          (iv) a music video;
             1939          (v) a commercial;
             1940          (vi) a documentary; or
             1941          (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
             1942      commission by administrative rule made in accordance with Subsection (54)(d); or
             1943          (b) notwithstanding Subsection (54)(a), purchases, leases, or rentals of machinery or
             1944      equipment by an establishment described in Subsection (54)(c) that is used for the production
             1945      or postproduction of the following are subject to the taxes imposed by this chapter:
             1946          (i) a live musical performance;
             1947          (ii) a live news program; or
             1948          (iii) a live sporting event;


             1949          (c) the following establishments listed in the 1997 North American Industry
             1950      Classification System of the federal Executive Office of the President, Office of Management
             1951      and Budget, apply to Subsections (54)(a) and (b):
             1952          (i) NAICS Code 512110; or
             1953          (ii) NAICS Code 51219; and
             1954          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1955      commission may by rule:
             1956          (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
             1957      or
             1958          (ii) define:
             1959          (A) "commercial distribution";
             1960          (B) "live musical performance";
             1961          (C) "live news program"; or
             1962          (D) "live sporting event";
             1963          (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             1964      on or before June 30, 2019, of machinery or equipment that:
             1965          (i) is leased or purchased for or by a facility that:
             1966          (A) is a renewable energy production facility;
             1967          (B) is located in the state; and
             1968          (C) (I) becomes operational on or after July 1, 2004; or
             1969          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             1970      2004, as a result of the use of the machinery or equipment;
             1971          (ii) has an economic life of five or more years; and
             1972          (iii) is used to make the facility or the increase in capacity of the facility described in
             1973      Subsection (55)(a)(i) operational up to the point of interconnection with an existing
             1974      transmission grid including:
             1975          (A) a wind turbine;
             1976          (B) generating equipment;
             1977          (C) a control and monitoring system;
             1978          (D) a power line;
             1979          (E) substation equipment;


             1980          (F) lighting;
             1981          (G) fencing;
             1982          (H) pipes; or
             1983          (I) other equipment used for locating a power line or pole; and
             1984          (b) this Subsection (55) does not apply to:
             1985          (i) machinery or equipment used in construction of:
             1986          (A) a new renewable energy production facility; or
             1987          (B) the increase in the capacity of a renewable energy production facility;
             1988          (ii) contracted services required for construction and routine maintenance activities;
             1989      and
             1990          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             1991      of the facility described in Subsection (55)(a)(i)(C)(II), machinery or equipment used or
             1992      acquired after:
             1993          (A) the renewable energy production facility described in Subsection (55)(a)(i) is
             1994      operational as described in Subsection (55)(a)(iii); or
             1995          (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
             1996      in Subsection (55)(a)(iii);
             1997          (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             1998      on or before June 30, 2019, of machinery or equipment that:
             1999          (i) is leased or purchased for or by a facility that:
             2000          (A) is a waste energy production facility;
             2001          (B) is located in the state; and
             2002          (C) (I) becomes operational on or after July 1, 2004; or
             2003          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             2004      2004, as a result of the use of the machinery or equipment;
             2005          (ii) has an economic life of five or more years; and
             2006          (iii) is used to make the facility or the increase in capacity of the facility described in
             2007      Subsection (56)(a)(i) operational up to the point of interconnection with an existing
             2008      transmission grid including:
             2009          (A) generating equipment;
             2010          (B) a control and monitoring system;


             2011          (C) a power line;
             2012          (D) substation equipment;
             2013          (E) lighting;
             2014          (F) fencing;
             2015          (G) pipes; or
             2016          (H) other equipment used for locating a power line or pole; and
             2017          (b) this Subsection (56) does not apply to:
             2018          (i) machinery or equipment used in construction of:
             2019          (A) a new waste energy facility; or
             2020          (B) the increase in the capacity of a waste energy facility;
             2021          (ii) contracted services required for construction and routine maintenance activities;
             2022      and
             2023          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             2024      described in Subsection (56)(a)(i)(C)(II), machinery or equipment used or acquired after:
             2025          (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
             2026      described in Subsection (56)(a)(iii); or
             2027          (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
             2028      in Subsection (56)(a)(iii);
             2029          (57) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             2030      or before June 30, 2019, of machinery or equipment that:
             2031          (i) is leased or purchased for or by a facility that:
             2032          (A) is located in the state;
             2033          (B) produces fuel from biomass energy including:
             2034          (I) methanol; or
             2035          (II) ethanol; and
             2036          (C) (I) becomes operational on or after July 1, 2004; or
             2037          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
             2038      a result of the installation of the machinery or equipment;
             2039          (ii) has an economic life of five or more years; and
             2040          (iii) is installed on the facility described in Subsection (57)(a)(i);
             2041          (b) this Subsection (57) does not apply to:


             2042          (i) machinery or equipment used in construction of:
             2043          (A) a new facility described in Subsection (57)(a)(i); or
             2044          (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
             2045          (ii) contracted services required for construction and routine maintenance activities;
             2046      and
             2047          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             2048      described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or acquired after:
             2049          (A) the facility described in Subsection (57)(a)(i) is operational; or
             2050          (B) the increased capacity described in Subsection (57)(a)(i) is operational;
             2051          (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
             2052      product transferred electronically to a person within this state if that tangible personal property
             2053      or product transferred electronically is subsequently shipped outside the state and incorporated
             2054      pursuant to contract into and becomes a part of real property located outside of this state;
             2055          (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
             2056      state or political entity to which the tangible personal property is shipped imposes a sales, use,
             2057      gross receipts, or other similar transaction excise tax on the transaction against which the other
             2058      state or political entity allows a credit for sales and use taxes imposed by this chapter; and
             2059          (c) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             2060      a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
             2061      refund:
             2062          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
             2063          (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
             2064      which the sale is made;
             2065          (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
             2066      sale prior to filing for the refund;
             2067          (iv) for sales and use taxes paid under this chapter on the sale;
             2068          (v) in accordance with Section 59-1-1410 ; and
             2069          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             2070      the person files for the refund on or before June 30, 2011;
             2071          (59) purchases:
             2072          (a) of one or more of the following items in printed or electronic format:


             2073          (i) a list containing information that includes one or more:
             2074          (A) names; or
             2075          (B) addresses; or
             2076          (ii) a database containing information that includes one or more:
             2077          (A) names; or
             2078          (B) addresses; and
             2079          (b) used to send direct mail;
             2080          (60) redemptions or repurchases of a product by a person if that product was:
             2081          (a) delivered to a pawnbroker as part of a pawn transaction; and
             2082          (b) redeemed or repurchased within the time period established in a written agreement
             2083      between the person and the pawnbroker for redeeming or repurchasing the product;
             2084          (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
             2085          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
             2086      and
             2087          (ii) has a useful economic life of one or more years; and
             2088          (b) the following apply to Subsection (61)(a):
             2089          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             2090          (ii) telecommunications equipment, machinery, or software required for 911 service;
             2091          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             2092          (iv) telecommunications switching or routing equipment, machinery, or software; or
             2093          (v) telecommunications transmission equipment, machinery, or software;
             2094          (62) (a) beginning on July 1, 2006, and ending on June 30, 2016, purchases of tangible
             2095      personal property or a product transferred electronically that are used in the research and
             2096      development of coal-to-liquids, oil shale, or tar sands technology; and
             2097          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2098      commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
             2099      purchases of tangible personal property or a product transferred electronically that are used in
             2100      the research and development of coal-to-liquids, oil shale, and tar sands technology;
             2101          (63) (a) purchases of tangible personal property or a product transferred electronically
             2102      if:
             2103          (i) the tangible personal property or product transferred electronically is:


             2104          (A) purchased outside of this state;
             2105          (B) brought into this state at any time after the purchase described in Subsection
             2106      (63)(a)(i)(A); and
             2107          (C) used in conducting business in this state; and
             2108          (ii) for:
             2109          (A) tangible personal property or a product transferred electronically other than the
             2110      tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
             2111      for a purpose for which the property is designed occurs outside of this state; or
             2112          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             2113      outside of this state;
             2114          (b) the exemption provided for in Subsection (63)(a) does not apply to:
             2115          (i) a lease or rental of tangible personal property or a product transferred electronically;
             2116      or
             2117          (ii) a sale of a vehicle exempt under Subsection (33); and
             2118          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             2119      purposes of Subsection (63)(a), the commission may by rule define what constitutes the
             2120      following:
             2121          (i) conducting business in this state if that phrase has the same meaning in this
             2122      Subsection (63) as in Subsection (24);
             2123          (ii) the first use of tangible personal property or a product transferred electronically if
             2124      that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
             2125          (iii) a purpose for which tangible personal property or a product transferred
             2126      electronically is designed if that phrase has the same meaning in this Subsection (63) as in
             2127      Subsection (24);
             2128          (64) sales of disposable home medical equipment or supplies if:
             2129          (a) a person presents a prescription for the disposable home medical equipment or
             2130      supplies;
             2131          (b) the disposable home medical equipment or supplies are used exclusively by the
             2132      person to whom the prescription described in Subsection (64)(a) is issued; and
             2133          (c) the disposable home medical equipment and supplies are listed as eligible for
             2134      payment under:


             2135          (i) Title XVIII, federal Social Security Act; or
             2136          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             2137          (65) sales:
             2138          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
             2139      District Act; or
             2140          (b) of tangible personal property to a subcontractor of a public transit district, if the
             2141      tangible personal property is:
             2142          (i) clearly identified; and
             2143          (ii) installed or converted to real property owned by the public transit district;
             2144          (66) sales of construction materials:
             2145          (a) purchased on or after July 1, 2010;
             2146          (b) purchased by, on behalf of, or for the benefit of an international airport:
             2147          (i) located within a county of the first class; and
             2148          (ii) that has a United States customs office on its premises; and
             2149          (c) if the construction materials are:
             2150          (i) clearly identified;
             2151          (ii) segregated; and
             2152          (iii) installed or converted to real property:
             2153          (A) owned or operated by the international airport described in Subsection (66)(b); and
             2154          (B) located at the international airport described in Subsection (66)(b);
             2155          (67) sales of construction materials:
             2156          (a) purchased on or after July 1, 2008;
             2157          (b) purchased by, on behalf of, or for the benefit of a new airport:
             2158          (i) located within a county of the second class; and
             2159          (ii) that is owned or operated by a city in which an airline as defined in Section
             2160      59-2-102 is headquartered; and
             2161          (c) if the construction materials are:
             2162          (i) clearly identified;
             2163          (ii) segregated; and
             2164          (iii) installed or converted to real property:
             2165          (A) owned or operated by the new airport described in Subsection (67)(b);


             2166          (B) located at the new airport described in Subsection (67)(b); and
             2167          (C) as part of the construction of the new airport described in Subsection (67)(b);
             2168          (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
             2169          (69) purchases and sales described in Section 9-3-511 ; [and]
             2170          (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
             2171      overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
             2172      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             2173      lists a state or country other than this state as the location of registry of the fixed wing turbine
             2174      powered aircraft; or
             2175          (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
             2176      provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
             2177      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             2178      lists a state or country other than this state as the location of registry of the fixed wing turbine
             2179      powered aircraft[.]; and
             2180          (71) subject to Section 59-12-104.4 , sales of a textbook for a higher education course:
             2181          (a) to a person admitted to an institution of higher education; and
             2182          (b) by a seller, other than a bookstore owned by an institution of higher education, if
             2183      51% or more of that seller's sales for the previous calendar quarter are sales of a textbook for a
             2184      higher education course.
             2185          Section 3. Section 59-12-104.4 is enacted to read:
             2186          59-12-104.4. Seller recordkeeping for purposes of higher education textbook
             2187      exemption -- Rulemaking authority.
             2188          (1) If a seller described in Subsection 59-12-104 (71)(b) makes a sale of a textbook for
             2189      a higher education course that is exempt under Subsection 59-12-104 (71), the seller shall keep
             2190      a record verifying that the textbook is a textbook for a higher education course.
             2191          (2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2192      commission may make rules:
             2193          (a) prescribing the records a seller shall keep to verify that a textbook is a textbook for
             2194      a higher education course; or
             2195          (b) to verify that 51% or more of a seller's sales for the previous calendar quarter are
             2196      sales of a textbook for a higher education course.


             2197          Section 4. Effective date.
             2198          This bill takes effect on July 1, 2011.




Legislative Review Note
    as of 2-4-11 11:58 AM


Office of Legislative Research and General Counsel


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