S.B. 284

1

COUNTY TAX AMENDMENTS
2 2011 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Jerry W. Stevenson
5 House Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill authorizes a county of the first class beginning July 1, 2011, and ending June
10 30, 2016, to levy an energy sales and use tax, and authorizes a county of the first class,
11 beginning July 1, 2011, and ending June 30, 2016, to levy a telecommunications license
12 tax.
13 Highlighted Provisions:
14 This bill:
15 . defines terms;
16 . authorizes a county of the first class, under certain circumstances, to levy an energy
17 sales and use tax;
18 . authorizes a county of the first class, under certain circumstances, to levy a
19 telecommunications license tax;
20 . amends related tax provisions; and
21 . makes technical corrections.
22 Money Appropriated in this Bill:
23 None
24 Other Special Clauses:
25 None
26 Utah Code Sections Affected:
27 AMENDS:

28 11-26-1, as last amended by Laws of Utah 2003, Chapter 253
29 59-1-302, as last amended by Laws of Utah 2009, Chapter 212
30 59-1-401, as last amended by Laws of Utah 2010, Chapter 233
31 59-1-1402, as last amended by Laws of Utah 2010, Chapter 233
32 59-12-107, as last amended by Laws of Utah 2009, Chapter 212
33 59-12-108, as last amended by Laws of Utah 2008, Chapters 286, 382, and 384
34 59-12-128, as last amended by Laws of Utah 2009, Chapter 212
35 72-7-102, as last amended by Laws of Utah 2008, Chapter 382
36 72-7-108, as last amended by Laws of Utah 2008, Chapter 382
37 ENACTS:
38 17-50-601, Utah Code Annotated 1953
39 17-50-602, Utah Code Annotated 1953
40 17-50-603, Utah Code Annotated 1953
41 17-50-604, Utah Code Annotated 1953
42 17-50-605, Utah Code Annotated 1953
43 17-50-606, Utah Code Annotated 1953
44 17-50-607, Utah Code Annotated 1953
45 17-50-608, Utah Code Annotated 1953
46 17-50-609, Utah Code Annotated 1953
47 17-50-610, Utah Code Annotated 1953
48 17-50-701, Utah Code Annotated 1953
49 17-50-702, Utah Code Annotated 1953
50 17-50-703, Utah Code Annotated 1953
51 17-50-704, Utah Code Annotated 1953
52 17-50-705, Utah Code Annotated 1953
53 17-50-706, Utah Code Annotated 1953
54 17-50-707, Utah Code Annotated 1953
55 17-50-708, Utah Code Annotated 1953
56 17-50-709, Utah Code Annotated 1953
57 17-50-710, Utah Code Annotated 1953
58

59 Be it enacted by the Legislature of the state of Utah:
60 Section 1. Section 11-26-1 is amended to read:
61 11-26-1. Definitions -- Ceiling on local charges based on gross revenues of public
62 service provider.
63 (1) As used in this chapter:
64 (a) "Local charge" means one or more of the following charges paid by a public service
65 provider to a county or municipality:
66 (i) a tax;
67 (ii) a license;
68 (iii) a fee;
69 (iv) a license fee;
70 (v) a license tax; or
71 (vi) a charge similar to Subsections (1)(a)(i) through (v).
72 (b) "Municipality" means:
73 (i) a city; or
74 (ii) a town.
75 (c) "Public service provider" means [a person engaged in the business of supplying
76 taxable] an energy supplier as defined in [Section] Sections 10-1-303 and 17-50-603 .
77 (2) A county or a municipality may not impose upon, charge, or collect from a public
78 service provider local charges:
79 (a) imposed on the basis of the gross revenues of the public service provider;
80 (b) derived from sales, use, or both sales and use of the service within the county or
81 municipality; and
82 (c) in a total amount that is greater than 6% of gross revenues.
83 (3) The determination of gross revenues under this section may not include:
84 (a) the sale of gas or electricity as special fuel for motor vehicles; or
85 (b) a local charge.
86 (4) This section may not be construed to:
87 (a) affect or limit the power of counties or municipalities to impose sales and use taxes
88 under:
89 (i) Title 59, Chapter 12, Sales and Use Tax Act; [or]

90 (ii) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act; or
91 (iii) Title 17, Chapter 50, Part 6, County Energy Sales and Use Tax Act; or
92 (b) grant any county or municipality the power to impose a local charge not otherwise
93 provided for by law.
94 (5) This section takes precedence over any conflicting provision of law.
95 Section 2. Section 17-50-601 is enacted to read:
96 Part 6. County Energy Sales and Use Tax Act
97 17-50-601. Title.
98 This part is known as the "County Energy Sales and Use Tax Act."
99 Section 3. Section 17-50-602 is enacted to read:
100 17-50-602. Purpose and intent.
101 The Legislature finds that:
102 (1) the energy industry has previously been highly regulated and monopolistic;
103 (2) counties have historically raised general fund revenues by collecting franchise and
104 business license revenues from the energy industry;
105 (3) substantial restructuring of the energy industry has created an opportunity for
106 increased competition within the energy industry;
107 (4) the restructuring of the energy industry has diminished the effectiveness and
108 fairness of the revenues collected by counties;
109 (5) to provide for a stable revenue source for counties and to create a more competitive
110 environment for the energy industry, it is necessary to enact taxing authority for counties that
111 accomplishes those goals; and
112 (6) this part does not alter or affect a county's authority to grant or regulate franchises,
113 or to control county streets, highways, or other property.
114 Section 4. Section 17-50-603 is enacted to read:
115 17-50-603. Definitions.
116 As used in this part:
117 (1) "Commission" means the State Tax Commission.
118 (2) "Contractual franchise fee" means:
119 (a) a fee:
120 (i) provided for in a franchise agreement; and

121 (ii) that is consideration for the franchise agreement; or
122 (b) (i) a fee similar to Subsection (2)(a); or
123 (ii) any combination of Subsections (2)(a) and (b).
124 (3) "County" means a county of the first class.
125 (4) (a) "Delivered value" means the fair market value of the taxable energy delivered
126 for sale or use in the unincorporated county and includes:
127 (i) the value of the energy itself; and
128 (ii) any transportation, freight, customer demand charges, service charges, or other
129 costs typically incurred in providing taxable energy in usable form to each class of customer in
130 the county.
131 (b) "Delivered value" does not include the amount of a tax paid under:
132 (i) Title 59, Chapter 12, Part 1, Tax Collection;
133 (ii) Title 59, Chapter 12, Part 2, Local Sales and Use Tax Act; or
134 (iii) this part.
135 (5) "De minimis amount" means an amount of taxable energy that does not exceed the
136 greater of:
137 (a) 5% of the energy supplier's estimated total Utah gross receipts from sales of
138 property or services; or
139 (b) $10,000.
140 (6) "Energy supplier" means a person supplying taxable energy, except that the
141 commission may by rule exclude from this definition a person supplying a de minimis amount
142 of taxable energy.
143 (7) "Franchise agreement" means:
144 (a) a franchise; or
145 (b) an ordinance, a contract, or an agreement granting a franchise.
146 (8) "Franchise tax" means:
147 (a) a franchise tax;
148 (b) a tax similar to a franchise tax; or
149 (c) any combination of Subsections (8)(a) and (b).
150 (9) "Person" is as defined in Section 59-12-102 .
151 (10) "Taxable energy" means gas and electricity.

152 Section 5. Section 17-50-604 is enacted to read:
153 17-50-604. County may levy tax -- Rate -- Imposition or repeal of tax -- Tax rate
154 change -- Effective date -- Notice requirements -- Exemptions.
155 (1) (a) Except as provided in Subsections (3), (4), and (5), a county, beginning July 1,
156 2011, and ending June 30, 2016, may levy a county energy sales and use tax on the sale or use
157 of taxable energy within the unincorporated county:
158 (i) by ordinance as provided in Section 17-50-605 ; and
159 (ii) of up to 6% of the delivered value of the taxable energy.
160 (b) A county energy sales and use tax imposed under this part may be in addition to any
161 sales and use tax imposed by the county under Title 59, Chapter 12, Sales and Use Tax Act.
162 (2) (a) For purposes of this Subsection (2):
163 (i) "Annexation" means an annexation to a county under Chapter 2, Part 2, County
164 Annexation.
165 (ii) "Annexing area" means an area that is annexed into a county.
166 (b) (i) If in accordance with Subsection (1)(a) a county enacts or repeals a tax or
167 changes the rate of a tax under this part, the enactment, repeal, or change shall take effect:
168 (A) on the first day of a calendar quarter; and
169 (B) after a 90-day period beginning on the date the commission receives notice meeting
170 the requirements of Subsection (2)(b)(ii) from the county.
171 (ii) The notice described in Subsection (2)(b)(i)(B) shall state:
172 (A) that the county will enact or repeal a tax or change the rate of a tax under this part;
173 (B) the statutory authority for the tax described in Subsection (2)(b)(ii)(A);
174 (C) the effective date of the tax described in Subsection (2)(b)(ii)(A); and
175 (D) if the county enacts the tax or changes the rate of the tax described in Subsection
176 (2)(b)(ii)(A), the new rate of the tax.
177 (c) (i) If, for an annexation that occurs on or after July 1, 2011, the annexation will
178 result in a change in the rate of a tax under this part for an annexing area, the change shall take
179 effect:
180 (A) on the first day of a calendar quarter; and
181 (B) after a 90-day period beginning on the date the commission receives notice meeting
182 the requirements of Subsection (2)(c)(ii) from the annexing county as defined in Section

183 17-2-202 .
184 (ii) The notice described in Subsection (2)(c)(i)(B) shall state:
185 (A) that the annexation described in Subsection (2)(c)(i) will result in a change in the
186 rate of a tax under this part for the annexing area;
187 (B) the statutory authority for the tax described in Subsection (2)(c)(ii)(A);
188 (C) the effective date of the tax described in Subsection (2)(c)(ii)(A); and
189 (D) the new rate of the tax described in Subsection (2)(c)(ii)(A).
190 (3) A sale or use of electricity within the unincorporated county is exempt from the tax
191 authorized by this section if the sale or use is:
192 (a) made under a tariff adopted by the Public Service Commission of Utah only for
193 purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
194 source, as designated in the tariff by the Public Service Commission of Utah; and
195 (b) for an amount of electricity that is:
196 (i) unrelated to the amount of electricity used by the person purchasing the electricity
197 under the tariff described in Subsection (3)(a); and
198 (ii) equivalent to the number of kilowatt-hours specified in the tariff described in
199 Subsection (3)(a) that may be purchased under the tariff described in Subsection (3)(a).
200 (4) A county may not levy a county energy sales and use tax within any portion of the
201 county that is within a project area described in a project area plan adopted by the military
202 installation development authority under Title 63H, Chapter 1, Military Installation
203 Development Authority Act.
204 (5) (a) Subject to the requirements of Subsection (5)(b), a franchise agreement between
205 a county and an energy supplier may contain a provision that:
206 (i) requires the energy supplier by agreement to pay a contractual franchise fee that is
207 otherwise prohibited under this part; and
208 (ii) imposes the contractual franchise fee on or after the day on which this part is:
209 (A) repealed, invalidated, or the maximum allowable rate provided in Section
210 17-50-605 is reduced; and
211 (B) not superseded by a law imposing a substantially equivalent tax.
212 (b) A county may not charge a contractual franchise fee under the provisions permitted
213 by Subsection (5)(a) unless the county charges an equal contractual franchise fee or a tax on all

214 energy suppliers.
215 Section 6. Section 17-50-605 is enacted to read:
216 17-50-605. County energy sales and use tax ordinance provisions.
217 Each county energy sales and use tax ordinance under Subsection 17-50-604 (1) shall
218 include:
219 (1) a provision imposing a tax on every sale or use of taxable energy made within the
220 unincorporated county at a rate determined by the county that is up to 6% of the delivered value
221 of the taxable energy;
222 (2) provisions substantially the same as those required by Title 59, Chapter 12, Part 1,
223 Tax Collection, as they relate to sales and use tax, except that:
224 (a) the tax shall be calculated on the delivered value of the taxable energy to the
225 consumer;
226 (b) an exemption is not allowed from a tax imposed under this part for the sale or use
227 of taxable energy that is exempt from the state sales and use tax under Title 59, Chapter 12,
228 Part 1, Tax Collection, except that the county shall include in its ordinance an exemption for:
229 (i) the sales and use of aviation fuel, motor fuel, or special fuel subject to taxation
230 under Title 59, Chapter 13, Motor and Special Fuel Tax Act;
231 (ii) the sales and use of taxable energy that the county is prohibited from taxing under
232 federal law or the Constitution of the United States or the Utah Constitution;
233 (iii) the sales and use of taxable energy purchased or stored in the state for resale;
234 (iv) the sales or use of taxable energy to a person if the primary use is for use in
235 compounding or producing taxable energy or a fuel subject to taxation under Title 59, Chapter
236 13, Motor and Special Fuel Tax Act;
237 (v) taxable energy brought into the state by a nonresident for the nonresident's own
238 personal use or enjoyment while within the state, except taxable energy purchased for use in
239 the state by a nonresident living or working in the state at the time of purchase;
240 (vi) the sales or use of taxable energy for any purpose other than use as a fuel or
241 energy; and
242 (vii) the sale of taxable energy for use outside a county imposing a county energy sales
243 and use tax;
244 (c) the ordinance may provide for an exemption from the county energy sales and use

245 tax under this part for customers who, as of July 1, 2011, were being supplied electrical energy
246 by a supplier other than the county if:
247 (i) the county is a generator of electrical energy for customers within its unincorporated
248 areas; and
249 (ii) the county is unable to generate electrical energy for the customer;
250 (d) the name of the county as the taxing agency shall be substituted for that of the state
251 when necessary for purposes of this part; and
252 (e) an additional license to collect the tax is not required if one has been issued under
253 Section 59-12-106 ;
254 (3) a provision that, on or before the effective date of the ordinance, the county shall
255 enter into a contract with the commission to have the commission perform all functions related
256 to the administration or operation of the ordinance, except that a county may collect the county
257 energy sales and use tax directly as provided in Subsection 17-50-607 (3);
258 (4) a provision that:
259 (a) except as provided under Subsection (4)(b), the sale, storage, use, or other
260 consumption of taxable energy is exempt from the tax due under the ordinance if the delivered
261 value of the taxable energy has been subject to a county energy sales or use tax under an
262 ordinance enacted in accordance with this part by another county in this state; and
263 (b) the county shall be paid the difference between the tax paid to another county as
264 described in this section and the tax that would otherwise be due under the ordinance if the tax
265 due under the ordinance exceeds the tax paid to another county; and
266 (5) a provision providing that the ordinance adopts by reference any amendments to the
267 provisions of Title 59, Chapter 12, Part 1, Tax Collection, that relate to levying or collecting a
268 county energy sales and use tax.
269 Section 7. Section 17-50-606 is enacted to read:
270 17-50-606. Rules for delivered value and point of sale.
271 (1) The delivered value of taxable energy under this part shall be established pursuant
272 to rules made by the commission in accordance with Title 63G, Chapter 3, Utah Administrative
273 Rulemaking Act.
274 (2) The rules made by the commission under Subsection (1) shall:
275 (a) provide that an arm's length sales price for taxable energy sold or used by a

276 taxpayer in the county is the delivered value, unless the sales price does not include some
277 portion of the taxable energy or component of delivered value;
278 (b) establish one or more default methods for determining the delivered value for each
279 customer class one time per calendar year on or before January 31 for taxable energy when the
280 commission determines that the sales price does not accurately reflect delivered value; and
281 (c) provide that for purposes of determining the point of sale or use of taxable energy,
282 the location of the meter is normally the point of sale or use unless the taxpayer demonstrates
283 that the use is not in an unincorporated area of a county imposing the county energy sales and
284 use tax.
285 (3) In establishing a default method under Subsection (2)(b), the commission:
286 (a) shall take into account quantity discounts and other reductions or increases in value
287 that are generally available in the marketplace for various grades or types of property and
288 classes of services; and
289 (b) may consider:
290 (i) generally applicable tariffs for various classes of utility services approved by the
291 Public Service Commission or other governmental entity;
292 (ii) posted prices;
293 (iii) spot-market prices;
294 (iv) trade publications;
295 (v) market data; and
296 (vi) other information and data prescribed by the commission.
297 Section 8. Section 17-50-607 is enacted to read:
298 17-50-607. Administration, collection, and enforcement of taxes by commission --
299 Distribution of revenues -- Charge for services -- Collection of taxes by county.
300 (1) Except as provided in Subsection (3), the commission shall administer, collect, and
301 enforce the county energy sales and use tax from energy suppliers according to the procedures
302 established in:
303 (a) Title 59, Chapter 1, General Taxation Policies; and
304 (b) Title 59, Chapter 12, Part 1, Tax Collection, except for Sections 59-12-107.1 and
305 59-12-123 .
306 (2) (a) Except as provided in Subsections 17-50-604 (5) and 17-50-605 (5), the

307 commission shall pay a county the difference between:
308 (i) the entire amount collected by the commission from the county energy sales and use
309 tax authorized by this part based on:
310 (A) the point of sale of the taxable energy if a taxable sale occurs in an unincorporated
311 area of a county that imposes a county energy sales and use tax as provided in this part; or
312 (B) the point of use of the taxable energy if the use occurs in an unincorporated area of
313 a county that imposes a county energy sales and use tax as provided in this part; and
314 (ii) the administration fee charged in accordance with Subsection (2)(c).
315 (b) In accordance with Subsection (2)(a), the commission shall transfer to the county
316 monthly by electronic transfer the revenues generated by the county energy sales and use tax
317 levied by the county and collected by the commission.
318 (c) (i) The commission shall charge a county imposing a county energy sales and use
319 tax a fee for administering the tax at the percentage provided in Section 59-12-206 , except that
320 the commission may not charge a fee for taxes collected by a county under Subsection (3).
321 (ii) The fee charged under Subsection (2)(c)(i) shall be:
322 (A) deposited in the Sales and Use Tax Administrative Fees Account; and
323 (B) used for sales tax administration as provided in Subsection 59-12-206 (2).
324 (3) An energy supplier shall pay the county energy sales and use tax revenues it
325 collects from its customers under this part directly to each county in which the energy supplier
326 has sales of taxable energy if:
327 (a) the county is the energy supplier; or
328 (b) (i) the energy supplier estimates that the county energy sales and use tax collected
329 annually by the energy supplier from its Utah customers equals $1,000,000 or more; and
330 (ii) the energy supplier collects the tax imposed under this part.
331 (4) An energy supplier paying a tax under this part directly to a county may retain the
332 percentage of the tax authorized under Subsection 59-12-108 (2) for the energy supplier's costs
333 of collecting and remitting the tax.
334 (5) An energy supplier paying the tax under this part directly to a county shall file an
335 information return with the commission, at least annually, on a form prescribed by the
336 commission.
337 Section 9. Section 17-50-608 is enacted to read:

338 17-50-608. Report of tax collections -- Allocation when location of taxpayer
339 cannot be accurately determined.
340 (1) All county energy sales and use taxes collected under this part shall be reported to
341 the commission on forms that accurately identify the county where the taxpayer is located.
342 (2) The commission shall make rules, in accordance with Title 63G, Chapter 3, Utah
343 Administrative Rulemaking Act, to proportionally distribute all taxes collected if the county
344 where the taxpayer is located cannot be accurately determined.
345 Section 10. Section 17-50-609 is enacted to read:
346 17-50-609. Limitation of other energy taxes or fees.
347 (1) Subject to the other provisions of this section, a county may not levy or collect an
348 energy tax or fee on a person except for an energy tax or fee imposed by the county:
349 (a) on an energy supplier to recover the management costs of the county caused by the
350 activities of the energy supplier in the right-of-way of a county, if the energy tax or fee:
351 (i) is imposed in accordance with Section 72-7-102 ; and
352 (ii) is not related to:
353 (A) a county's loss of use of a highway as a result of the activities of the energy
354 supplier in a right-of-way; or
355 (B) increased deterioration of a highway as a result of the activities of the energy
356 supplier in a right-of-way; or
357 (b) on a person that:
358 (i) is not subject to a county energy sales and use tax under this part; and
359 (ii) locates an energy facility in the county, including:
360 (A) an electrical transmission line;
361 (B) an electrical substation;
362 (C) a natural gas pipeline; or
363 (D) a natural gas regulation station.
364 (2) Subsection (1)(a) may not be interpreted as exempting an energy supplier from
365 complying with any ordinance:
366 (a) related to excavation, construction, or installation of an energy facility described in
367 Subsection (1)(b)(ii); and
368 (b) that addresses the safety and quality standards of the county for excavation,

369 construction, or installation.
370 (3) An energy tax or fee imposed under Subsection (1)(b) shall be imposed:
371 (a) by ordinance; and
372 (b) on a competitively neutral basis.
373 Section 11. Section 17-50-610 is enacted to read:
374 17-50-610. Metalliferous mining -- Exemption from county energy sales and use
375 tax.
376 A county may not levy a county energy sales and use tax on energy sold or consumed in
377 metalliferous mining activities.
378 Section 12. Section 17-50-701 is enacted to read:
379 Part 7. County Telecommunications License Tax Act
380 17-50-701. Title.
381 This part is known as the "County Telecommunications License Tax Act."
382 Section 13. Section 17-50-702 is enacted to read:
383 17-50-702. Definitions.
384 As used in this part:
385 (1) "Commission" means the State Tax Commission.
386 (2) "Contractual franchise fee" means:
387 (a) a fee:
388 (i) provided for in a franchise agreement; and
389 (ii) that is consideration for the franchise agreement; or
390 (b) (i) a fee similar to Subsection (2)(a); or
391 (ii) any combination of Subsections (2)(a) and (b).
392 (3) "County" means a county of the first class.
393 (4) (a) Subject to Subsections (4)(b) and (c), "customer" means the person who is
394 obligated under a contract with a telecommunications provider to pay for telecommunications
395 service received under the contract.
396 (b) For purposes of this section and Section 17-50-707 , "customer" means:
397 (i) the person who is obligated under a contract with a telecommunications provider to
398 pay for telecommunications service received under the contract; or
399 (ii) if the end user is not the person described in Subsection (4)(b)(i), the end user of

400 telecommunications service.
401 (c) "Customer" does not include a reseller:
402 (i) of telecommunications service; or
403 (ii) for mobile telecommunications service, of a serving carrier under an agreement to
404 serve the customer outside the telecommunications provider's licensed service area.
405 (5) (a) "End user" means the person who uses a telecommunications service.
406 (b) For purposes of telecommunications service provided to a person who is not an
407 individual, "end user" means the individual who uses the telecommunications service on behalf
408 of the person who is provided the telecommunications service.
409 (6) "Franchise agreement" means:
410 (a) a franchise; or
411 (b) an ordinance, a contract, or an agreement granting a franchise.
412 (7) "Franchise tax" means:
413 (a) a franchise tax;
414 (b) a tax similar to a franchise tax; or
415 (c) any combination of Subsections (7)(a) and (b).
416 (8) (a) "Gross receipts from telecommunications service" means the revenue that a
417 telecommunications provider receives for telecommunications service rendered except for
418 amounts collected or paid as:
419 (i) a tax, fee, or charge:
420 (A) imposed by a governmental entity;
421 (B) separately identified as a tax, fee, or charge in the transaction with the customer for
422 the telecommunications service; and
423 (C) imposed only on a telecommunications provider;
424 (ii) sales and use taxes collected by the telecommunications provider from a customer
425 under Title 59, Chapter 12, Sales and Use Tax Act; or
426 (iii) interest, a fee, or a charge that is charged by a telecommunications provider on a
427 customer for failure to pay for telecommunications service when payment is due.
428 (b) "Gross receipts from telecommunications service" includes a charge necessary to
429 complete a sale of a telecommunications service.
430 (9) "Mobile telecommunications service" is as defined in the Mobile

431 Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
432 (10) "Place of primary use":
433 (a) for telecommunications service other than mobile telecommunications service,
434 means the street address representative of where the customer's use of the telecommunications
435 service primarily occurs, which shall be:
436 (i) the residential street address of the customer; or
437 (ii) the primary business street address of the customer; or
438 (b) for mobile telecommunications service, is as defined in the Mobile
439 Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
440 (11) Notwithstanding where a call is billed or paid, "service address" means:
441 (a) if the location described in this Subsection (11)(a) is known, the location of the
442 telecommunications equipment:
443 (i) to which a call is charged; and
444 (ii) from which the call originates or terminates;
445 (b) if the location described in Subsection (11)(a) is not known but the location
446 described in this Subsection (11)(b) is known, the location of the origination point of the signal
447 of the telecommunications service first identified by:
448 (i) the telecommunications system of the telecommunications provider; or
449 (ii) if the system used to transport the signal is not a system of the telecommunications
450 provider, information received by the telecommunications provider from its service provider;
451 or
452 (c) if the locations described in Subsection (11)(a) or (b) are not known, the location of
453 a customer's place of primary use.
454 (12) (a) Subject to Subsections (12)(b) and (c), "telecommunications provider" means a
455 person that:
456 (i) owns, controls, operates, or manages a telecommunications service; or
457 (ii) engages in an activity described in Subsection (12)(a)(i) for the shared use with or
458 resale to any person of the telecommunications service.
459 (b) A person described in Subsection (12)(a) is a telecommunications provider whether
460 or not the Public Service Commission of Utah regulates:
461 (i) that person; or

462 (ii) the telecommunications service that the person owns, controls, operates, or
463 manages.
464 (c) "Telecommunications provider" does not include an aggregator as defined in
465 Section 54-8b-2 .
466 (13) "Telecommunications service" means:
467 (a) telecommunications service, as defined in Section 59-12-102 , other than mobile
468 telecommunications service, that originates and terminates within the boundaries of this state;
469 (b) mobile telecommunications service, as defined in Section 59-12-102 :
470 (i) that originates and terminates within the boundaries of one state; and
471 (ii) only to the extent permitted by the Mobile Telecommunications Sourcing Act, 4
472 U.S.C. Sec. 116 et seq.; or
473 (c) an ancillary service as defined in Section 59-12-102 .
474 (14) (a) Except as provided in Subsection (14)(b), "telecommunications tax or fee"
475 means any of the following imposed by a county on a telecommunications provider:
476 (i) a tax;
477 (ii) a license;
478 (iii) a fee;
479 (iv) a license fee;
480 (v) a license tax;
481 (vi) a franchise fee; or
482 (vii) a charge similar to a tax, license, or fee described in Subsections (14)(a)(i)
483 through (vi).
484 (b) "Telecommunications tax or fee" does not include:
485 (i) the county telecommunications license tax authorized by this part; or
486 (ii) a tax, fee, or charge, including a tax imposed under Title 59, Revenue and
487 Taxation, that is imposed:
488 (A) on telecommunications providers; and
489 (B) on persons who are not telecommunications providers.
490 Section 14. Section 17-50-703 is enacted to read:
491 17-50-703. County may levy county telecommunications license tax -- Recovery
492 from customers -- Enactment, repeal, or change in rate of tax -- Annexation.

493 (1) (a) Subject to the provisions of this section and except as provided in Subsection
494 (1)(b), beginning July 1, 2011, and ending June 30, 2016, a county may levy on and provide
495 that there is collected from a telecommunications provider a county telecommunications
496 license tax on the telecommunications provider's gross receipts from telecommunications
497 service that are attributed to the unincorporated county in accordance with Section 17-50-707 .
498 (b) To levy and provide for the collection of a county telecommunications license tax
499 under this part, the county shall adopt an ordinance that complies with the requirements of
500 Section 17-50-704 .
501 (c) Beginning on July 1, 2011, a county telecommunications license tax imposed under
502 this part shall be at a rate of up to 3.5% of the telecommunications provider's gross receipts
503 from telecommunications service that are attributed to the county in accordance with Section
504 17-50-707 .
505 (2) A telecommunications provider may recover the amounts paid in county
506 telecommunications license taxes from the customers of the telecommunications provider
507 within the county imposing the unincorporated county telecommunications license tax through
508 a charge that is separately identified in the statement of the transaction with the customer as the
509 recovery of a tax.
510 (3) (a) For purposes of this Subsection (3):
511 (i) "Annexation" means an annexation to a county under Chapter 2, Part 2, County
512 Annexation.
513 (ii) "Annexing area" means an area that is annexed into a county.
514 (b) (i) If, in accordance with Subsection (1), a county enacts or repeals a tax or changes
515 the rate of the tax under this part, the enactment, repeal, or change shall take effect:
516 (A) on the first day of a calendar quarter; and
517 (B) after a 90-day period beginning on the date the commission receives notice meeting
518 the requirements of Subsection (3)(b)(ii) from the county.
519 (ii) The notice described in Subsection (3)(b)(i)(B) shall state:
520 (A) that the county will enact or repeal a tax under this part or change the rate of the
521 tax;
522 (B) the statutory authority for the tax described in Subsection (3)(b)(ii)(A);
523 (C) the effective date of the tax described in Subsection (3)(b)(ii)(A); and

524 (D) if the county enacts the county telecommunications license tax or changes the rate
525 of the tax, the new rate of the tax.
526 (c) (i) If, for an annexation that occurs on or after July 1, 2011, the annexation will
527 result in a change in the rate of the tax under this part for an annexing area, the change shall
528 take effect:
529 (A) on the first day of a calendar quarter; and
530 (B) after a 90-day period beginning on the date the commission receives notice meeting
531 the requirements of Subsection (3)(c)(ii) from the county that annexes the annexing area.
532 (ii) The notice described in Subsection (3)(c)(i)(B) shall state:
533 (A) that the annexation described in Subsection (3)(c)(i) will result in a change in the
534 rate of a tax under this part for the annexing area;
535 (B) the statutory authority for the tax described in Subsection (3)(c)(ii)(A);
536 (C) the effective date of the tax described in Subsection (3)(c)(ii)(A); and
537 (D) the new rate of the tax described in Subsection (3)(c)(ii)(A).
538 (4) A county may not levy or collect a county telecommunications license tax for
539 telecommunications service provided within any portion of the county that is within a project
540 area described in a project area plan adopted by the military installation development authority
541 under Title 63H, Chapter 1, Military Installation Development Authority Act.
542 Section 15. Section 17-50-704 is enacted to read:
543 17-50-704. County telecommunications license tax ordinance provisions.
544 An ordinance required by Section 17-50-703 shall include a provision that:
545 (1) levies an unincorporated county telecommunications license tax:
546 (a) on the gross receipts from telecommunications service attributed to the county in
547 accordance with Section 17-50-707 ;
548 (b) at a rate:
549 (i) not to exceed the rate specified in Section 17-50-703 ; and
550 (ii) subject to the requirements of Section 17-50-707 ;
551 (c) (i) beginning on or after July 1, 2010; and
552 (ii) ending before or on June 30, 2016; and
553 (d) subject to the requirements of Section 17-50-703 ;
554 (2) on or before the effective date of the ordinance, the county shall enter into the

555 uniform interlocal agreement with the commission described in Section 17-50-705 under which
556 the commission collects, enforces, and administers the county telecommunications license tax;
557 (3) exempts a county from the limitation on the rate that may be imposed under
558 Subsection (1)(b)(i) if the exemption from the limitation on the rate that may be imposed under
559 Subsection (1)(b)(i) is approved by a majority vote of the voters in the unincorporated county
560 that vote in:
561 (a) a county general election;
562 (b) a regular general election; or
563 (c) a local special election;
564 (4) incorporates the provisions of Section 17-50-708 ; and
565 (5) provides a credit against the tax in the amount of a contractual franchise fee paid if:
566 (a) a telecommunications provider pays a contractual franchise fee to a county pursuant
567 to a franchise agreement in effect on July 1, 2011;
568 (b) the contractual franchise fee is passed through by the energy supplier to a taxpayer
569 as a separately itemized charge; and
570 (c) the energy supplier has accepted the franchise.
571 Section 16. Section 17-50-705 is enacted to read:
572 17-50-705. Collection of taxes by commission -- Uniform interlocal agreement --
573 Rulemaking authority -- Charge for services.
574 (1) Subject to the other provisions of this section, the commission shall collect,
575 enforce, and administer any county telecommunications license tax imposed under this part
576 pursuant to:
577 (a) the same procedures used in the administration, collection, and enforcement of the
578 state sales and use tax under:
579 (i) Title 59, Chapter 1, General Taxation Policies; and
580 (ii) Title 59, Chapter 12, Part 1, Tax Collection:
581 (A) except for:
582 (I) Subsection 59-12-103 (2)(g);
583 (II) Section 59-12-104 ;
584 (III) Section 59-12-104.1 ;
585 (IV) Section 59-12-104.2 ;

586 (V) Section 59-12-104.3 ;
587 (VI) Section 59-12-107.1 ; and
588 (VII) Section 59-12-123 ; and
589 (B) except that for purposes of Section 59-1-1410 , the term "person" may include a
590 customer from whom a county telecommunications license tax is recovered in accordance with
591 Subsection 17-50-703 (2); and
592 (b) a uniform interlocal agreement:
593 (i) between:
594 (A) the county that imposes the county telecommunications license tax; and
595 (B) the commission;
596 (ii) that is executed under Title 11, Chapter 13, Interlocal Cooperation Act;
597 (iii) that complies with Subsection (2)(a); and
598 (iv) that is developed by rule in accordance with Subsection (2)(b).
599 (2) (a) The uniform interlocal agreement described in Subsection (1)(b) shall provide
600 that the commission shall:
601 (i) transmit money collected under this part:
602 (A) monthly; and
603 (B) by electronic funds transfer by the commission to the county;
604 (ii) conduct audits of the county telecommunications license tax;
605 (iii) charge the county for the commission's services under this section in an amount:
606 (A) sufficient to reimburse the commission for the cost to the commission in rendering
607 the services; and
608 (B) that may not exceed an amount equal to 1.5% of the county telecommunications
609 license tax imposed by the ordinance of the county; and
610 (iv) collect, enforce, and administer the county telecommunications license tax
611 authorized under this part pursuant to the same procedures used in the administration,
612 collection, and enforcement of the state sales and use tax as provided in Subsection (1)(a).
613 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
614 commission shall develop a uniform interlocal agreement that meets the requirements of this
615 section.
616 (3) The administrative fee charged under Subsection (2)(a) shall be:

617 (a) deposited in the Sales and Use Tax Administrative Fees Account; and
618 (b) used for administration of county telecommunications license taxes under this part.
619 Section 17. Section 17-50-706 is enacted to read:
620 17-50-706. Limitation of other telecommunications taxes or fees.
621 (1) Subject to the other provisions of this section, a county may not levy or collect a
622 telecommunications tax or fee on a person except for a telecommunications tax or fee imposed
623 by the county:
624 (a) on a telecommunications provider to recover the management costs of the county
625 caused by the activities of the telecommunications provider in the right-of-way of a county if
626 the telecommunications tax or fee:
627 (i) is imposed in accordance with Section 72-7-102 ; and
628 (ii) is not related to:
629 (A) a county's loss of use of a highway as a result of the activities of the
630 telecommunications provider in a right-of-way; or
631 (B) increased deterioration of a highway as a result of the activities of the
632 telecommunications provider in a right-of-way; or
633 (b) on a person that:
634 (i) is not subject to a county telecommunications license tax under this part; and
635 (ii) locates telecommunications facilities, as defined in Section 72-7-108 , in the county.
636 (2) Subsection (1)(a) may not be interpreted as exempting a telecommunications
637 provider from complying with any ordinance:
638 (a) related to excavation, construction, or installation of a telecommunications facility;
639 and
640 (b) that addresses the safety and quality standards of the county for excavation,
641 construction, or installation.
642 (3) A telecommunications tax or fee imposed under Subsection (1)(b) shall be
643 imposed:
644 (a) by ordinance; and
645 (b) on a competitively neutral basis.
646 Section 18. Section 17-50-707 is enacted to read:
647 17-50-707. Attributing the gross receipts from telecommunications service to a

648 county -- Rate impact.
649 (1) The gross receipts from a telecommunications service are attributed to a county if
650 the gross receipts are from a transaction for telecommunications service that is located within
651 the county:
652 (a) for purposes of sales and use taxes under Title 59, Chapter 12, Sales and Use Tax
653 Act; and
654 (b) determined in accordance with Section 59-12-215 .
655 (2) (a) The rate imposed on the gross receipts for telecommunications service shall be
656 determined in accordance with Subsection (2)(b) if the location of a transaction for
657 telecommunications service is determined under Subsection (1) to be a county other than the
658 county in which is located:
659 (i) for telecommunications service other than mobile telecommunications service, the
660 customer's service address; or
661 (ii) for mobile telecommunications service, the customer's primary place of use.
662 (b) The rate imposed on the gross receipts for telecommunications service described in
663 Subsection (2)(a) shall be the lower of:
664 (i) the rate imposed by the taxing jurisdiction in which the transaction is located under
665 Subsection (1); or
666 (ii) the rate imposed by the county in which the transaction is located:
667 (A) for telecommunications service other than mobile telecommunications service, the
668 customer's service address; or
669 (B) for mobile telecommunications service, the customer's primary place of use.
670 Section 19. Section 17-50-708 is enacted to read:
671 17-50-708. Procedure for taxes erroneously recovered from customers.
672 A customer may not bring a cause of action against a telecommunications provider on
673 the basis that the telecommunications provider erroneously recovered from the customer
674 county telecommunications license taxes authorized by this part unless the customer meets the
675 same requirements that a purchaser is required to meet to bring a cause of action against a
676 seller for a refund or credit as provided in Subsection 59-12-110.1 (3).
677 Section 20. Section 17-50-709 is enacted to read:
678 17-50-709. Transactions consisting of telecommunications service and

679 nontelecommunications services.
680 (1) For purposes of this section, "nontelecommunications services" means services or
681 tangible personal property that are:
682 (a) not telecommunications services; and
683 (b) provided by a telecommunications provider to a customer.
684 (2) Except to the extent prohibited by federal law, if a telecommunications provider
685 provides nontelecommunications services to a customer as part of the same transaction in
686 which the telecommunications provider provides telecommunications services, the gross
687 receipts from the nontelecommunications services provided by the telecommunications
688 provider are subject to a tax under this part unless:
689 (a) the charge for the nontelecommunications services is separately identified in the
690 statement of the transaction with the customer of the telecommunications service; or
691 (b) from the books and records of the telecommunications provider that are kept in the
692 regular course of business, the telecommunications provider can reasonably identify the portion
693 of the total charge for the transaction that is attributable to:
694 (i) the nontelecommunications services; and
695 (ii) the telecommunications service.
696 Section 21. Section 17-50-710 is enacted to read:
697 17-50-710. Existing telecommunications franchise or contractual franchise fees.
698 (1) Except as authorized in Subsection (2) or Section 59-12-203 or 17-50-704 , a county
699 may not:
700 (a) impose on, charge, or collect a franchise tax or contractual franchise fee from a
701 telecommunications supplier; or
702 (b) collect a franchise tax or contractual franchise fee pursuant to a franchise agreement
703 in effect on July 1, 2011.
704 (2) (a) A county that collects a contractual franchise fee from a telecommunications
705 supplier pursuant to a franchise agreement in effect on July 1, 2011, may continue to collect
706 that fee at the same rate for the remaining term of the franchise agreement, except the county
707 shall provide a credit against the county telecommunications license tax in the amount of the
708 contractual franchise fee paid by the telecommunications provider pursuant to Subsection
709 17-50-704 (5) and Subsection (2)(b).

710 (b) A county may not provide a credit described in Subsection (2)(a) for a service in a
711 franchise agreement other than a telecommunications service.
712 (3) (a) Subject to the requirements of Subsection (3)(b), a franchise agreement between
713 a county and a telecommunications provider may contain a provision that:
714 (i) requires the telecommunications provider by agreement to pay a contractual
715 franchise fee that is otherwise prohibited under this part; and
716 (ii) imposes the contractual franchise fee on or after the day on which this part:
717 (A) is repealed, invalidated, or the maximum allowable rate provided in Section
718 17-50-703 is reduced; and
719 (B) is not superseded by a law imposing a substantially equivalent tax.
720 (b) A county may not charge a contractual franchise fee under the provisions permitted
721 by Subsection (3)(a) unless the county charges an equal contractual franchise fee or a tax on all
722 telecommunications providers.
723 (4) This section may not affect the validity of any existing or future franchise
724 agreement and any franchise agreement effective on July 1, 2011, shall remain in full force and
725 effect, unless otherwise terminated or altered by agreement or applicable law.
726 Section 22. Section 59-1-302 is amended to read:
727 59-1-302. Penalty for nonpayment of certain taxes -- Jeopardy proceedings.
728 (1) This section applies to the following:
729 (a) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
730 (b) a tax under Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax
731 Act;
732 (c) a tax under Title 17, Chapter 50, Part 6, County Energy Sales and Use Tax Act; and
733 (d) a tax under Title 17, Chapter 50, Part 7, County Telecommunications License Tax
734 Act.
735 [(c)] (e) a tax under Chapter 10, Part 4, Withholding of Tax;
736 [(d)] (f) a tax under Chapter 12, Sales and Use Tax Act;
737 [(e)] (g) a tax under Chapter 13, Part 2, Motor Fuel;
738 [(f)] (h) a tax under Chapter 13, Part 3, Special Fuel; [and]
739 [(g)] (i) a tax under Chapter 13, Part 4, Aviation Fuel[.];
740 (2) (a) A person required to collect, truthfully account for, and pay over a tax listed in

741 Subsection (1) who willfully fails to collect the tax, fails to truthfully account for and pay over
742 the tax, or attempts in any manner to evade or defeat the tax or the payment of the tax, is liable
743 for a penalty equal to the total amount of the tax evaded, not collected, not accounted for, or
744 not paid over.
745 (b) The penalty described in Subsection (2)(a) is in addition to other penalties provided
746 by law.
747 (3) (a) If the commission determines in accordance with Subsection (2) that a person is
748 liable for the penalty, the commission shall mail a notice of the proposed penalty to the person.
749 (b) The notice of proposed penalty shall:
750 (i) set forth the basis of the assessment; and
751 (ii) be mailed:
752 (A) in accordance with Section 59-1-1404 ; and
753 (B) to the person's last-known address.
754 (4) Upon receipt of the notice of proposed penalty, the person against whom the
755 penalty is proposed may:
756 (a) pay the amount of the proposed penalty at the place and time stated in the notice; or
757 (b) proceed in accordance with the review procedures of Subsection (5).
758 (5) A person against whom a penalty is proposed in accordance with Subsections (2)
759 and (3) may contest the proposed penalty by filing a petition for an adjudicative proceeding
760 with the commission.
761 (6) If the commission determines that the collection of the penalty is in jeopardy, this
762 section does not prevent the immediate collection of the penalty in accordance with the
763 procedures and requirements for an emergency proceeding under Title 63G, Chapter 4,
764 Administrative Procedures Act.
765 (7) (a) In a hearing before the commission and in a judicial review of the hearing, the
766 commission and the court shall consider any inference and evidence that a person has willfully
767 failed to collect, truthfully account for, or pay over a tax listed in Subsection (1).
768 (b) It is prima facie evidence that a person has willfully failed to collect, truthfully
769 account for, or pay over a tax listed in Subsection (1) if the commission or a court finds that the
770 person charged with the responsibility of collecting, accounting for, or paying over the taxes:
771 (i) made a voluntary, conscious, and intentional decision to prefer other creditors over

772 the state government or utilize the tax money for personal purposes;
773 (ii) recklessly disregarded obvious or known risks that resulted in the failure to collect,
774 truthfully account for, or pay over the tax; or
775 (iii) failed to investigate or to correct mismanagement, having notice that the tax was
776 not or is not being collected, accounted for, or paid over as provided by law.
777 (c) The commission or court is not required to find a bad motive or specific intent to
778 defraud the government or deprive the government of revenue to establish willfulness under
779 this section.
780 (d) If the commission determines that a person is liable for the penalty under
781 Subsection (2), the commission shall assess the penalty and give notice and demand for
782 payment in accordance with Section 59-1-1411 .
783 Section 23. Section 59-1-401 is amended to read:
784 59-1-401. Definitions -- Offenses and penalties -- Rulemaking authority -- Statute
785 of limitations -- Commission authority to waive, reduce, or compromise penalty or
786 interest.
787 (1) As used in this section:
788 (a) "Activated tax, fee, or charge" means a tax, fee, or charge with respect to which the
789 commission:
790 (i) has implemented the commission's GenTax system; and
791 (ii) at least 30 days before implementing the commission's GenTax system as described
792 in Subsection (1)(a)(i), has provided notice in a conspicuous place on the commission's website
793 stating:
794 (A) the date the commission will implement the GenTax system with respect to the tax,
795 fee, or charge; and
796 (B) that, at the time the commission implements the GenTax system with respect to the
797 tax, fee, or charge:
798 (I) a person that files a return after the due date as described in Subsection (2)(a) is
799 subject to the penalty described in Subsection (2)(c)(ii); and
800 (II) a person that fails to pay the tax, fee, or charge as described in Subsection (3)(a) is
801 subject to the penalty described in Subsection (3)(b)(ii).
802 (b) "Activation date for a tax, fee, or charge" means with respect to a tax, fee, or

803 charge, the later of:
804 (i) the date on which the commission implements the commission's GenTax system
805 with respect to the tax, fee, or charge; or
806 (ii) 30 days after the date the commission provides the notice described in Subsection
807 (1)(a)(ii) with respect to the tax, fee, or charge.
808 (c) (i) Except as provided in Subsection (1)(c)(ii), "tax, fee, or charge" means:
809 (A) a tax, fee, or charge the commission administers under:
810 (I) this title;
811 (II) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
812 (III) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
813 (IV) Title 17, Chapter 50, Part 6, County Energy Sales and Use Tax Act;
814 (V) Title 17, Chapter 50, Part 7, County Telecommunications License Tax Act;
815 [(IV)] (VI) Section 19-6-410.5 ;
816 [(V)] (VII) Section 19-6-714 ;
817 [(VI)] (VIII) Section 19-6-805 ;
818 [(VII)] (IX) Section 34A-2-202 ;
819 [(VIII)] (X) Section 40-6-14 ;
820 [(IX)] (XI) Section 69-2-5 ;
821 [(X)] (XII) Section 69-2-5.5 ; or
822 [(XI)] (XIII) Section 69-2-5.6 ; or
823 (B) another amount that by statute is subject to a penalty imposed under this section.
824 (ii) "Tax, fee, or charge" does not include a tax, fee, or charge imposed under:
825 (A) Title 41, Chapter 1a, Motor Vehicle Act, except for Section 41-1a-301 ;
826 (B) Title 41, Chapter 3, Motor Vehicle Business Regulation Act;
827 (C) Chapter 2, Property Tax Act, except for Section 59-2-1309 ;
828 (D) Chapter 3, Tax Equivalent Property Act; or
829 (E) Chapter 4, Privilege Tax.
830 (d) "Unactivated tax, fee, or charge" means a tax, fee, or charge except for an activated
831 tax, fee, or charge.
832 (2) (a) The due date for filing a return is:
833 (i) if the person filing the return is not allowed by law an extension of time for filing

834 the return, the day on which the return is due as provided by law; or
835 (ii) if the person filing the return is allowed by law an extension of time for filing the
836 return, the earlier of:
837 (A) the date the person files the return; or
838 (B) the last day of that extension of time as allowed by law.
839 (b) A penalty in the amount described in Subsection (2)(c) is imposed if a person files a
840 return after the due date described in Subsection (2)(a).
841 (c) For purposes of Subsection (2)(b), the penalty is an amount equal to the greater of:
842 (i) if the return described in Subsection (2)(b) is filed with respect to an unactivated
843 tax, fee, or charge:
844 (A) $20; or
845 (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or
846 (ii) if the return described in Subsection (2)(b) is filed with respect to an activated tax,
847 fee, or charge, beginning on the activation date for the tax, fee, or charge:
848 (A) $20; or
849 (B) (I) 2% of the unpaid activated tax, fee, or charge due on the return if the return is
850 filed no later than five days after the due date described in Subsection (2)(a);
851 (II) 5% of the unpaid activated tax, fee, or charge due on the return if the return is filed
852 more than five days after the due date but no later than 15 days after the due date described in
853 Subsection (2)(a); or
854 (III) 10% of the unpaid activated tax, fee, or charge due on the return if the return is
855 filed more than 15 days after the due date described in Subsection (2)(a).
856 (d) This Subsection (2) does not apply to:
857 (i) an amended return; or
858 (ii) a return with no tax due.
859 (3) (a) A person is subject to a penalty for failure to pay a tax, fee, or charge if:
860 (i) the person files a return on or before the due date for filing a return described in
861 Subsection (2)(a), but fails to pay the tax, fee, or charge due on the return on or before that due
862 date;
863 (ii) the person:
864 (A) is subject to a penalty under Subsection (2)(b); and

865 (B) fails to pay the tax, fee, or charge due on a return within a 90-day period after the
866 due date for filing a return described in Subsection (2)(a);
867 (iii) (A) the person is subject to a penalty under Subsection (2)(b); and
868 (B) the commission estimates an amount of tax due for that person in accordance with
869 Subsection 59-1-1406 (2);
870 (iv) the person:
871 (A) is mailed a notice of deficiency; and
872 (B) within a 30-day period after the day on which the notice of deficiency described in
873 Subsection (3)(a)(iv)(A) is mailed:
874 (I) does not file a petition for redetermination or a request for agency action; and
875 (II) fails to pay the tax, fee, or charge due on a return;
876 (v) (A) the commission:
877 (I) issues an order constituting final agency action resulting from a timely filed petition
878 for redetermination or a timely filed request for agency action; or
879 (II) is considered to have denied a request for reconsideration under Subsection
880 63G-4-302 (3)(b) resulting from a timely filed petition for redetermination or a timely filed
881 request for agency action; and
882 (B) the person fails to pay the tax, fee, or charge due on a return within a 30-day period
883 after the date the commission:
884 (I) issues the order constituting final agency action described in Subsection
885 (3)(a)(v)(A)(I); or
886 (II) is considered to have denied the request for reconsideration described in
887 Subsection (3)(a)(v)(A)(II); or
888 (vi) the person fails to pay the tax, fee, or charge within a 30-day period after the date
889 of a final judicial decision resulting from a timely filed petition for judicial review.
890 (b) For purposes of Subsection (3)(a), the penalty is an amount equal to the greater of:
891 (i) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
892 respect to an unactivated tax, fee, or charge:
893 (A) $20; or
894 (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or
895 (ii) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with

896 respect to an activated tax, fee, or charge, beginning on the activation date:
897 (A) $20; or
898 (B) (I) 2% of the unpaid activated tax, fee, or charge due on the return if the activated
899 tax, fee, or charge due on the return is paid no later than five days after the due date for filing a
900 return described in Subsection (2)(a);
901 (II) 5% of the unpaid activated tax, fee, or charge due on the return if the activated tax,
902 fee, or charge due on the return is paid more than five days after the due date for filing a return
903 described in Subsection (2)(a) but no later than 15 days after that due date; or
904 (III) 10% of the unpaid activated tax, fee, or charge due on the return if the activated
905 tax, fee, or charge due on the return is paid more than 15 days after the due date for filing a
906 return described in Subsection (2)(a).
907 (4) (a) Beginning January 1, 1995, in the case of any underpayment of estimated tax or
908 quarterly installments required by Sections 59-5-107 , 59-5-207 , 59-7-504 , and 59-9-104 , there
909 shall be added a penalty in an amount determined by applying the interest rate provided under
910 Section 59-1-402 plus four percentage points to the amount of the underpayment for the period
911 of the underpayment.
912 (b) (i) For purposes of Subsection (4)(a), the amount of the underpayment shall be the
913 excess of the required installment over the amount, if any, of the installment paid on or before
914 the due date for the installment.
915 (ii) The period of the underpayment shall run from the due date for the installment to
916 whichever of the following dates is the earlier:
917 (A) the original due date of the tax return, without extensions, for the taxable year; or
918 (B) with respect to any portion of the underpayment, the date on which that portion is
919 paid.
920 (iii) For purposes of this Subsection (4), a payment of estimated tax shall be credited
921 against unpaid required installments in the order in which the installments are required to be
922 paid.
923 (5) (a) Notwithstanding Subsection (2) and except as provided in Subsection (6), a
924 person allowed by law an extension of time for filing a corporate franchise or income tax return
925 under Chapter 7, Corporate Franchise and Income Taxes, or an individual income tax return
926 under Chapter 10, Individual Income Tax Act, is subject to a penalty in the amount described in

927 Subsection (5)(b) if, on or before the day on which the return is due as provided by law, not
928 including the extension of time, the person fails to pay:
929 (i) for a person filing a corporate franchise or income tax return under Chapter 7,
930 Corporate Franchise and Income Taxes, the payment required by Subsection 59-7-507 (1)(b); or
931 (ii) for a person filing an individual income tax return under Chapter 10, Individual
932 Income Tax Act, the payment required by Subsection 59-10-516 (2).
933 (b) For purposes of Subsection (5)(a), the penalty per month during the period of the
934 extension of time for filing the return is an amount equal to 2% of the tax due on the return,
935 unpaid as of the day on which the return is due as provided by law.
936 (6) If a person does not file a return within an extension of time allowed by Section
937 59-7-505 or 59-10-516 , the person:
938 (a) is not subject to a penalty in the amount described in Subsection (5)(b); and
939 (b) is subject to a penalty in an amount equal to the sum of:
940 (i) a late file penalty in an amount equal to the greater of:
941 (A) $20; or
942 (B) 10% of the tax due on the return, unpaid as of the day on which the return is due as
943 provided by law, not including the extension of time; and
944 (ii) a late pay penalty in an amount equal to the greater of:
945 (A) $20; or
946 (B) 10% of the unpaid tax due on the return, unpaid as of the day on which the return is
947 due as provided by law, not including the extension of time.
948 (7) (a) Additional penalties for an underpayment of a tax, fee, or charge are as provided
949 in this Subsection (7)(a).
950 (i) Except as provided in Subsection (7)(c), if any portion of an underpayment of a tax,
951 fee, or charge is due to negligence, the penalty is 10% of the portion of the underpayment that
952 is due to negligence.
953 (ii) Except as provided in Subsection (7)(d), if any portion of an underpayment of a
954 tax, fee, or charge is due to intentional disregard of law or rule, the penalty is 15% of the entire
955 underpayment.
956 (iii) If any portion of an underpayment is due to an intent to evade a tax, fee, or charge,
957 the penalty is the greater of $500 per period or 50% of the entire underpayment.

958 (iv) If any portion of an underpayment is due to fraud with intent to evade a tax, fee, or
959 charge, the penalty is the greater of $500 per period or 100% of the entire underpayment.
960 (b) If the commission determines that a person is liable for a penalty imposed under
961 Subsection (7)(a)(ii), (iii), or (iv), the commission shall notify the person of the proposed
962 penalty.
963 (i) The notice of proposed penalty shall:
964 (A) set forth the basis of the assessment; and
965 (B) be mailed by certified mail, postage prepaid, to the person's last-known address.
966 (ii) Upon receipt of the notice of proposed penalty, the person against whom the
967 penalty is proposed may:
968 (A) pay the amount of the proposed penalty at the place and time stated in the notice;
969 or
970 (B) proceed in accordance with the review procedures of Subsection (7)(b)(iii).
971 (iii) A person against whom a penalty is proposed in accordance with this Subsection
972 (7) may contest the proposed penalty by filing a petition for an adjudicative proceeding with
973 the commission.
974 (iv) (A) If the commission determines that a person is liable for a penalty under this
975 Subsection (7), the commission shall assess the penalty and give notice and demand for
976 payment.
977 (B) The commission shall mail the notice and demand for payment described in
978 Subsection (7)(b)(iv)(A):
979 (I) to the person's last-known address; and
980 (II) in accordance with Section 59-1-1404 .
981 (c) A seller that voluntarily collects a tax under Subsection 59-12-107 (1)(b) is not
982 subject to the penalty under Subsection (7)(a)(i) if on or after July 1, 2001:
983 (i) a court of competent jurisdiction issues a final unappealable judgment or order
984 determining that:
985 (A) the seller meets one or more of the criteria described in Subsection
986 59-12-107 (1)(a); and
987 (B) the commission or a county, city, or town may require the seller to collect a tax
988 under Subsections 59-12-103 (2)(a) through (d); or

989 (ii) the commission issues a final unappealable administrative order determining that:
990 (A) the seller meets one or more of the criteria described in Subsection
991 59-12-107 (1)(a); and
992 (B) the commission or a county, city, or town may require the seller to collect a tax
993 under Subsections 59-12-103 (2)(a) through (d).
994 (d) A seller that voluntarily collects a tax under Subsection 59-12-107 (1)(b) is not
995 subject to the penalty under Subsection (7)(a)(ii) if:
996 (i) (A) a court of competent jurisdiction issues a final unappealable judgment or order
997 determining that:
998 (I) the seller meets one or more of the criteria described in Subsection 59-12-107 (1)(a);
999 and
1000 (II) the commission or a county, city, or town may require the seller to collect a tax
1001 under Subsections 59-12-103 (2)(a) through (d); or
1002 (B) the commission issues a final unappealable administrative order determining that:
1003 (I) the seller meets one or more of the criteria described in Subsection 59-12-107 (1)(a);
1004 and
1005 (II) the commission or a county, city, or town may require the seller to collect a tax
1006 under Subsections 59-12-103 (2)(a) through (d); and
1007 (ii) the seller's intentional disregard of law or rule is warranted by existing law or by a
1008 nonfrivolous argument for the extension, modification, or reversal of existing law or the
1009 establishment of new law.
1010 (8) The penalty for failure to file an information return, information report, or a
1011 complete supporting schedule is $50 for each information return, information report, or
1012 supporting schedule up to a maximum of $1,000.
1013 (9) If a person, in furtherance of a frivolous position, has a prima facie intent to delay
1014 or impede administration of a law relating to a tax, fee, or charge and files a purported return
1015 that fails to contain information from which the correctness of reported tax, fee, or charge
1016 liability can be determined or that clearly indicates that the tax, fee, or charge liability shown is
1017 substantially incorrect, the penalty is $500.
1018 (10) (a) A seller that fails to remit a tax, fee, or charge monthly as required by
1019 Subsection 59-12-108 (1)(a):

1020 (i) is subject to a penalty described in Subsection (2); and
1021 (ii) may not retain the percentage of sales and use taxes that would otherwise be
1022 allowable under Subsection 59-12-108 (2).
1023 (b) A seller that fails to remit a tax, fee, or charge by electronic funds transfer as
1024 required by Subsection 59-12-108 (1)(a)(ii)(B):
1025 (i) is subject to a penalty described in Subsection (2); and
1026 (ii) may not retain the percentage of sales and use taxes that would otherwise be
1027 allowable under Subsection 59-12-108 (2).
1028 (11) (a) A person is subject to the penalty provided in Subsection (11)(c) if that person:
1029 (i) commits an act described in Subsection (11)(b) with respect to one or more of the
1030 following documents:
1031 (A) a return;
1032 (B) an affidavit;
1033 (C) a claim; or
1034 (D) a document similar to Subsections (11)(a)(i)(A) through (C);
1035 (ii) knows or has reason to believe that the document described in Subsection (11)(a)(i)
1036 will be used in connection with any material matter administered by the commission; and
1037 (iii) knows that the document described in Subsection (11)(a)(i), if used in connection
1038 with any material matter administered by the commission, would result in an understatement of
1039 another person's liability for a tax, fee, or charge.
1040 (b) The following acts apply to Subsection (11)(a)(i):
1041 (i) preparing any portion of a document described in Subsection (11)(a)(i);
1042 (ii) presenting any portion of a document described in Subsection (11)(a)(i);
1043 (iii) procuring any portion of a document described in Subsection (11)(a)(i);
1044 (iv) advising in the preparation or presentation of any portion of a document described
1045 in Subsection (11)(a)(i);
1046 (v) aiding in the preparation or presentation of any portion of a document described in
1047 Subsection (11)(a)(i);
1048 (vi) assisting in the preparation or presentation of any portion of a document described
1049 in Subsection (11)(a)(i); or
1050 (vii) counseling in the preparation or presentation of any portion of a document

1051 described in Subsection (11)(a)(i).
1052 (c) For purposes of Subsection (11)(a), the penalty:
1053 (i) shall be imposed by the commission;
1054 (ii) is $500 for each document described in Subsection (11)(a)(i) with respect to which
1055 the person described in Subsection (11)(a) meets the requirements of Subsection (11)(a); and
1056 (iii) is in addition to any other penalty provided by law.
1057 (d) The commission may seek a court order to enjoin a person from engaging in
1058 conduct that is subject to a penalty under this Subsection (11).
1059 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1060 commission may make rules prescribing the documents that are similar to Subsections
1061 (11)(a)(i)(A) through (C).
1062 (12) (a) As provided in Section 76-8-1101 , criminal offenses and penalties are as
1063 provided in Subsections (12)(b) through (e).
1064 (b) (i) A person who is required by this title or any laws the commission administers or
1065 regulates to register with or obtain a license or permit from the commission, who operates
1066 without having registered or secured a license or permit, or who operates when the registration,
1067 license, or permit is expired or not current, is guilty of a class B misdemeanor.
1068 (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (12)(b)(i), the
1069 penalty may not:
1070 (A) be less than $500; or
1071 (B) exceed $1,000.
1072 (c) (i) A person who, with intent to evade a tax, fee, or charge or requirement of this
1073 title or any lawful requirement of the commission, fails to make, render, sign, or verify a return
1074 or to supply information within the time required by law, or who makes, renders, signs, or
1075 verifies a false or fraudulent return or statement, or who supplies false or fraudulent
1076 information, is guilty of a third degree felony.
1077 (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (12)(c)(i), the
1078 penalty may not:
1079 (A) be less than $1,000; or
1080 (B) exceed $5,000.
1081 (d) (i) A person who intentionally or willfully attempts to evade or defeat a tax, fee, or

1082 charge or the payment of a tax, fee, or charge is, in addition to other penalties provided by law,
1083 guilty of a second degree felony.
1084 (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (12)(d)(i), the
1085 penalty may not:
1086 (A) be less than $1,500; or
1087 (B) exceed $25,000.
1088 (e) (i) A person is guilty of a second degree felony if that person commits an act:
1089 (A) described in Subsection (12)(e)(ii) with respect to one or more of the following
1090 documents:
1091 (I) a return;
1092 (II) an affidavit;
1093 (III) a claim; or
1094 (IV) a document similar to Subsections (12)(e)(i)(A)(I) through (III); and
1095 (B) subject to Subsection (12)(e)(iii), with knowledge that [the] a document described
1096 in Subsection (12)(e)(i)(A):
1097 (I) is false or fraudulent as to any material matter; and
1098 (II) could be used in connection with any material matter administered by the
1099 commission.
1100 (ii) The following acts apply to Subsection (12)(e)(i):
1101 (A) preparing any portion of a document described in Subsection (12)(e)(i)(A);
1102 (B) presenting any portion of a document described in Subsection (12)(e)(i)(A);
1103 (C) procuring any portion of a document described in Subsection (12)(e)(i)(A);
1104 (D) advising in the preparation or presentation of any portion of a document described
1105 in Subsection (12)(e)(i)(A);
1106 (E) aiding in the preparation or presentation of any portion of a document described in
1107 Subsection (12)(e)(i)(A);
1108 (F) assisting in the preparation or presentation of any portion of a document described
1109 in Subsection (12)(e)(i)(A); or
1110 (G) counseling in the preparation or presentation of any portion of a document
1111 described in Subsection (12)(e)(i)(A).
1112 (iii) This Subsection (12)(e) applies:

1113 (A) regardless of whether the person for which the document described in Subsection
1114 (12)(e)(i)(A) is prepared or presented:
1115 (I) knew of the falsity of the document described in Subsection (12)(e)(i)(A); or
1116 (II) consented to the falsity of [the] a document described in Subsection (12)(e)(i)(A);
1117 and
1118 (B) in addition to any other penalty provided by law.
1119 (iv) Notwithstanding Section 76-3-301 , for purposes of this Subsection (12)(e), the
1120 penalty may not:
1121 (A) be less than $1,500; or
1122 (B) exceed $25,000.
1123 (v) The commission may seek a court order to enjoin a person from engaging in
1124 conduct that is subject to a penalty under this Subsection (12)(e).
1125 (vi) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
1126 the commission may make rules prescribing the documents that are similar to Subsections
1127 (12)(e)(i)(A)(I) through (III).
1128 (f) The statute of limitations for prosecution for a violation of this Subsection (12) is
1129 the later of six years:
1130 (i) from the date the tax should have been remitted; or
1131 (ii) after the day on which the person commits the criminal offense.
1132 (13) Upon making a record of its actions, and upon reasonable cause shown, the
1133 commission may waive, reduce, or compromise any of the penalties or interest imposed under
1134 this part.
1135 Section 24. Section 59-1-1402 is amended to read:
1136 59-1-1402. Definitions.
1137 As used in this part:
1138 (1) "Administrative cost" means a fee imposed to cover:
1139 (a) the cost of filing;
1140 (b) the cost of administering a garnishment; or
1141 (c) a cost similar to Subsection (1)(a) or (b) as determined by the commission by rule
1142 made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1143 (2) "Books and records" means the following made available in printed or electronic

1144 format:
1145 (a) an account;
1146 (b) a book;
1147 (c) an invoice;
1148 (d) a memorandum;
1149 (e) a paper;
1150 (f) a record; or
1151 (g) an item similar to Subsections (2)(a) through (f) as determined by the commission
1152 by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1153 (3) "Deficiency" means:
1154 (a) the amount by which a tax, fee, or charge exceeds the difference between:
1155 (i) the sum of:
1156 (A) the amount shown as the tax, fee, or charge by a person on the person's return; and
1157 (B) any amount previously assessed, or collected without assessment, as a deficiency;
1158 and
1159 (ii) any amount previously abated, credited, refunded, or otherwise repaid with respect
1160 to that tax, fee, or charge; or
1161 (b) if a person does not show an amount as a tax, fee, or charge on the person's return,
1162 or if a person does not make a return, the amount by which the tax, fee, or charge exceeds:
1163 (i) the amount previously assessed, or collected without assessment, as a deficiency;
1164 and
1165 (ii) any amount previously abated, credited, refunded, or otherwise repaid with respect
1166 to that tax, fee, or charge.
1167 (4) "Garnishment" means any legal or equitable procedure through which one or more
1168 of the following are required to be withheld for payment of an amount a person owes:
1169 (a) an asset of the person held by another person; or
1170 (b) the earnings of the person.
1171 (5) "Liability" means the following that a person is required to remit to the
1172 commission:
1173 (a) a tax, fee, or charge;
1174 (b) an addition to a tax, fee, or charge;

1175 (c) an administrative cost;
1176 (d) interest that accrues in accordance with Section 59-1-402 ; or
1177 (e) a penalty that accrues in accordance with Section 59-1-401 .
1178 (6) (a) Subject to Subsection (6)(b), "mathematical error" is as defined in Section
1179 6213(g)(2), Internal Revenue Code.
1180 (b) The reference to Section 6213(g)(2), Internal Revenue Code, in Subsection (6)(a)
1181 means:
1182 (i) the reference to Section 6213(g)(2), Internal Revenue Code, in effect for the taxable
1183 year; or
1184 (ii) a corresponding or comparable provision of the Internal Revenue Code as
1185 amended, redesignated, or reenacted.
1186 (7) (a) Except as provided in Subsection (7)(b), "tax, fee, or charge" means:
1187 (i) a tax, fee, or charge the commission administers under:
1188 (A) this title;
1189 (B) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1190 (C) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
1191 (D) Title 17, Chapter 50, Part 6, County Energy Sales and Use Tax Act;
1192 (E) Title 17, Chapter 50, Part 7, County Telecommunications License Tax Act;
1193 [(D)] (F) Section 19-6-410.5 ;
1194 [(E)] (G) Section 19-6-714 ;
1195 [(F)] (H) Section 19-6-805 ;
1196 [(G)] (I) Section 34A-2-202 ;
1197 [(H)] (J) Section 40-6-14 ;
1198 [(I)] (K) Section 69-2-5 ;
1199 [(J)] (L) Section 69-2-5.5 ; or
1200 [(K)] (M) Section 69-2-5.6 ; or
1201 (ii) another amount that by statute is administered by the commission.
1202 (b) "Tax, fee, or charge" does not include a tax, fee, or charge imposed under:
1203 (i) Title 41, Chapter 1a, Motor Vehicle Act, except for Section 41-1a-301 ;
1204 (ii) Title 41, Chapter 3, Motor Vehicle Business Regulation Act;
1205 (iii) Chapter 2, Property Tax Act;

1206 (iv) Chapter 3, Tax Equivalent Property Act;
1207 (v) Chapter 4, Privilege Tax; or
1208 (vi) Chapter 13, Part 5, Interstate Agreements.
1209 (8) "Transferee" means:
1210 (a) a devisee;
1211 (b) a distributee;
1212 (c) a donee;
1213 (d) an heir;
1214 (e) a legatee; or
1215 (f) a person similar to Subsections (8)(a) through (e) as determined by the commission
1216 by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1217 Section 25. Section 59-12-107 is amended to read:
1218 59-12-107. Collection, remittance, and payment of tax by sellers or other persons
1219 -- Returns -- Reports -- Direct payment by purchaser of vehicle -- Other liability for
1220 collection -- Rulemaking authority -- Credits -- Treatment of bad debt -- Penalties.
1221 (1) (a) Except as provided in Subsection (1)(d) or Section 59-12-107.1 or 59-12-123
1222 and subject to Subsection (1)(e), each seller shall pay or collect and remit the sales and use
1223 taxes imposed by this chapter if within this state the seller:
1224 (i) has or utilizes:
1225 (A) an office;
1226 (B) a distribution house;
1227 (C) a sales house;
1228 (D) a warehouse;
1229 (E) a service enterprise; or
1230 (F) a place of business similar to Subsections (1)(a)(i)(A) through (E);
1231 (ii) maintains a stock of goods;
1232 (iii) regularly solicits orders, regardless of whether or not the orders are accepted in the
1233 state, unless the seller's only activity in the state is:
1234 (A) advertising; or
1235 (B) solicitation by:
1236 (I) direct mail;

1237 (II) electronic mail;
1238 (III) the Internet;
1239 (IV) telecommunications service; or
1240 (V) a means similar to Subsection (1)(a)(iii)(A) or (B);
1241 (iv) regularly engages in the delivery of property in the state other than by:
1242 (A) common carrier; or
1243 (B) United States mail; or
1244 (v) regularly engages in an activity directly related to the leasing or servicing of
1245 property located within the state.
1246 (b) A seller that does not meet one or more of the criteria provided for in Subsection
1247 (1)(a):
1248 (i) except as provided in Subsection (1)(b)(ii), may voluntarily:
1249 (A) collect a tax on a transaction described in Subsection 59-12-103 (1); and
1250 (B) remit the tax to the commission as provided in this part; or
1251 (ii) notwithstanding Subsection (1)(b)(i), shall collect a tax on a transaction described
1252 in Subsection 59-12-103 (1) if Section 59-12-103.1 requires the seller to collect the tax.
1253 (c) The collection and remittance of a tax under this chapter by a seller that is
1254 registered under the agreement may not be used as a factor in determining whether that seller is
1255 required by Subsection (1)(a) to:
1256 (i) pay a tax, fee, or charge under:
1257 (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1258 (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
1259 (C) Title 17, Chapter 50, Part 6, County Energy Sales and Use Tax Act;
1260 (D) Title 17, Chapter 50, Part 7, County Telecommunications License Tax Act;
1261 [(C)] (E) Section 19-6-714 ;
1262 [(D)] (F) Section 19-6-805 ;
1263 [(E)] (G) Section 69-2-5 ;
1264 [(F)] (H) Section 69-2-5.5 ;
1265 [(G)] (I) Section 69-2-5.6 ; or
1266 [(H)] (J) this title; or
1267 (ii) collect and remit a tax, fee, or charge under:

1268 (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1269 (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
1270 (C) Title 17, Chapter 50, Part 6, County Energy Sales and Use Tax Act;
1271 (D) Title 17, Chapter 50, Part 7, County Telecommunications License Tax Act;
1272 [(C)] (E) Section 19-6-714 ;
1273 [(D)] (F) Section 19-6-805 ;
1274 [(E)] (G) Section 69-2-5 ;
1275 [(F)] (H) Section 69-2-5.5 ;
1276 [(G)] (I) Section 69-2-5.6 ; or
1277 [(H)] (J) this title.
1278 (d) A person shall pay a use tax imposed by this chapter on a transaction described in
1279 Subsection 59-12-103 (1) if:
1280 (i) the seller did not collect a tax imposed by this chapter on the transaction; and
1281 (ii) the person:
1282 (A) stores the tangible personal property or product transferred electronically in the
1283 state;
1284 (B) uses the tangible personal property or product transferred electronically in the state;
1285 or
1286 (C) consumes the tangible personal property or product transferred electronically in the
1287 state.
1288 (e) The ownership of property that is located at the premises of a printer's facility with
1289 which the retailer has contracted for printing and that consists of the final printed product,
1290 property that becomes a part of the final printed product, or copy from which the printed
1291 product is produced, shall not result in the retailer being considered to have or maintain an
1292 office, distribution house, sales house, warehouse, service enterprise, or other place of
1293 business, or to maintain a stock of goods, within this state.
1294 (f) (i) As used in this Subsection (1)(f):
1295 (A) "Affiliated group" is as defined in Section 59-7-101 , except that "affiliated group"
1296 includes a corporation that is qualified to do business but is not otherwise doing business in
1297 this state.
1298 (B) "Common ownership" is as defined in Section 59-7-101 .

1299 (C) "Related seller" means a seller that:
1300 (I) is not required to pay or collect and remit sales and use taxes under Subsection
1301 (1)(a) or Section 59-12-103.1 ;
1302 (II) is:
1303 (Aa) related to a seller that is required to pay or collect and remit sales and use taxes
1304 under Subsection (1)(a) as part of an affiliated group or because of common ownership; or
1305 (Bb) a limited liability company owned by the parent corporation of an affiliated group
1306 if that parent corporation of the affiliated group is required to pay or collect and remit sales and
1307 use taxes under Subsection (1)(a); and
1308 (III) does not voluntarily collect and remit a tax under Subsection (1)(b)(i).
1309 (ii) A seller is not required to pay or collect and remit sales and use taxes under
1310 Subsection (1)(a):
1311 (A) if the seller is a related seller;
1312 (B) if the seller to which the related seller is related does not engage in any of the
1313 following activities on behalf of the related seller:
1314 (I) advertising;
1315 (II) marketing;
1316 (III) sales; or
1317 (IV) other services; and
1318 (C) if the seller to which the related seller is related accepts the return of an item sold
1319 by the related seller, the seller to which the related seller is related accepts the return of that
1320 item:
1321 (I) sold by a seller that is not a related seller; and
1322 (II) on the same terms as the return of an item sold by that seller to which the related
1323 seller is related.
1324 (2) (a) Except as provided in Section 59-12-107.1 , a tax under this chapter shall be
1325 collected from a purchaser.
1326 (b) A seller may not collect as tax an amount, without regard to fractional parts of one
1327 cent, in excess of the tax computed at the rates prescribed by this chapter.
1328 (c) (i) Each seller shall:
1329 (A) give the purchaser a receipt for the tax collected; or

1330 (B) bill the tax as a separate item and declare the name of this state and the seller's
1331 sales and use tax license number on the invoice for the sale.
1332 (ii) The receipt or invoice is prima facie evidence that the seller has collected the tax
1333 and relieves the purchaser of the liability for reporting the tax to the commission as a
1334 consumer.
1335 (d) A seller is not required to maintain a separate account for the tax collected, but is
1336 considered to be a person charged with receipt, safekeeping, and transfer of public moneys.
1337 (e) Taxes collected by a seller pursuant to this chapter shall be held in trust for the
1338 benefit of the state and for payment to the commission in the manner and at the time provided
1339 for in this chapter.
1340 (f) If any seller, during any reporting period, collects as a tax an amount in excess of
1341 the lawful state and local percentage of total taxable sales allowed under this chapter, the seller
1342 shall remit to the commission the full amount of the tax imposed under this chapter, plus any
1343 excess.
1344 (g) If the accounting methods regularly employed by the seller in the transaction of the
1345 seller's business are such that reports of sales made during a calendar month or quarterly period
1346 will impose unnecessary hardships, the commission may accept reports at intervals that will, in
1347 the commission's opinion, better suit the convenience of the taxpayer or seller and will not
1348 jeopardize collection of the tax.
1349 (3) (a) Except as provided in Subsections (4) through (6) and Section 59-12-108 , the
1350 sales or use tax imposed by this chapter is due and payable to the commission quarterly on or
1351 before the last day of the month next succeeding each calendar quarterly period.
1352 (b) (i) Each seller shall, on or before the last day of the month next succeeding each
1353 calendar quarterly period, file with the commission a return for the preceding quarterly period.
1354 (ii) The seller shall remit with the return under Subsection (3)(b)(i) the amount of the
1355 tax required under this chapter to be collected or paid for the period covered by the return.
1356 (c) Except as provided in Subsection (4)(c), a return shall contain information and be in
1357 a form the commission prescribes by rule.
1358 (d) The sales tax as computed in the return shall be based upon the total nonexempt
1359 sales made during the period, including both cash and charge sales.
1360 (e) The use tax as computed in the return shall be based upon the total amount of

1361 purchases for storage, use, or other consumption in this state made during the period, including
1362 both by cash and by charge.
1363 (f) (i) Subject to Subsection (3)(f)(ii) and in accordance with Title 63G, Chapter 3,
1364 Utah Administrative Rulemaking Act, the commission may by rule extend the time for making
1365 returns and paying the taxes.
1366 (ii) An extension under Subsection (3)(f)(i) may not be for more than 90 days.
1367 (g) The commission may require returns and payment of the tax to be made for other
1368 than quarterly periods if the commission considers it necessary in order to ensure the payment
1369 of the tax imposed by this chapter.
1370 (h) (i) The commission may require a seller that files a simplified electronic return with
1371 the commission to file an additional electronic report with the commission.
1372 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1373 commission may make rules providing:
1374 (A) the information required to be included in the additional electronic report described
1375 in Subsection (3)(h)(i); and
1376 (B) one or more due dates for filing the additional electronic report described in
1377 Subsection (3)(h)(i).
1378 (4) (a) As used in this Subsection (4) and Subsection (5)(b), "remote seller" means a
1379 seller that is:
1380 (i) registered under the agreement;
1381 (ii) described in Subsection (1)(b); and
1382 (iii) not a:
1383 (A) model 1 seller;
1384 (B) model 2 seller; or
1385 (C) model 3 seller.
1386 (b) (i) Except as provided in Subsection (4)(b)(ii), a tax a remote seller collects in
1387 accordance with Subsection (1)(b) is due and payable:
1388 (A) to the commission;
1389 (B) annually; and
1390 (C) on or before the last day of the month immediately following the last day of each
1391 calendar year.

1392 (ii) The commission may require that a tax a remote seller collects in accordance with
1393 Subsection (1)(b) be due and payable:
1394 (A) to the commission; and
1395 (B) on the last day of the month immediately following any month in which the seller
1396 accumulates a total of at least $1,000 in agreement sales and use tax.
1397 (c) (i) If a remote seller remits a tax to the commission in accordance with Subsection
1398 (4)(b), the remote seller shall file a return:
1399 (A) with the commission;
1400 (B) with respect to the tax;
1401 (C) containing information prescribed by the commission; and
1402 (D) on a form prescribed by the commission.
1403 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1404 commission shall make rules prescribing:
1405 (A) the information required to be contained in a return described in Subsection
1406 (4)(a)(i); and
1407 (B) the form described in Subsection (4)(c)(i)(D).
1408 (d) A tax a remote seller collects in accordance with this Subsection (4) shall be
1409 calculated on the basis of the total amount of taxable transactions under Subsection
1410 59-12-103 (1) the remote seller completes, including:
1411 (i) a cash transaction; and
1412 (ii) a charge transaction.
1413 (5) (a) Except as provided in Subsection (5)(b), a tax a seller that files a simplified
1414 electronic return collects in accordance with this chapter is due and payable:
1415 (i) monthly on or before the last day of the month immediately following the month for
1416 which the seller collects a tax under this chapter; and
1417 (ii) for the month for which the seller collects a tax under this chapter.
1418 (b) A tax a remote seller that files a simplified electronic return collects in accordance
1419 with this chapter is due and payable as provided in Subsection (4).
1420 (6) (a) On each vehicle sale made by other than a regular licensed vehicle dealer, the
1421 purchaser shall pay the sales or use tax directly to the commission if the vehicle is subject to
1422 titling or registration under the laws of this state.

1423 (b) The commission shall collect the tax described in Subsection (6)(a) when the
1424 vehicle is titled or registered.
1425 (7) If any sale of tangible personal property or any other taxable transaction under
1426 Subsection 59-12-103 (1), is made by a wholesaler to a retailer, the wholesaler is not
1427 responsible for the collection or payment of the tax imposed on the sale and the retailer is
1428 responsible for the collection or payment of the tax imposed on the sale if:
1429 (a) the retailer represents that the personal property is purchased by the retailer for
1430 resale; and
1431 (b) the personal property is not subsequently resold.
1432 (8) If any sale of property or service subject to the tax is made to a person prepaying
1433 sales or use tax in accordance with Title 63M, Chapter 5, Resource Development Act, or to a
1434 contractor or subcontractor of that person, the person to whom such payment or consideration
1435 is payable is not responsible for the collection or payment of the sales or use tax and the person
1436 prepaying the sales or use tax is responsible for the collection or payment of the sales or use tax
1437 if the person prepaying the sales or use tax represents that the amount prepaid as sales or use
1438 tax has not been fully credited against sales or use tax due and payable under the rules
1439 promulgated by the commission.
1440 (9) (a) For purposes of this Subsection (9):
1441 (i) Except as provided in Subsection (9)(a)(ii), "bad debt" is as defined in Section 166,
1442 Internal Revenue Code.
1443 (ii) Notwithstanding Subsection (9)(a)(i), "bad debt" does not include:
1444 (A) an amount included in the purchase price of tangible personal property, a product
1445 transferred electronically, or a service that is:
1446 (I) not a transaction described in Subsection 59-12-103 (1); or
1447 (II) exempt under Section 59-12-104 ;
1448 (B) a financing charge;
1449 (C) interest;
1450 (D) a tax imposed under this chapter on the purchase price of tangible personal
1451 property, a product transferred electronically, or a service;
1452 (E) an uncollectible amount on tangible personal property or a product transferred
1453 electronically that:

1454 (I) is subject to a tax under this chapter; and
1455 (II) remains in the possession of a seller until the full purchase price is paid;
1456 (F) an expense incurred in attempting to collect any debt; or
1457 (G) an amount that a seller does not collect on repossessed property.
1458 (b) A seller may deduct bad debt from the total amount from which a tax under this
1459 chapter is calculated on a return.
1460 (c) A seller may file a refund claim with the commission if:
1461 (i) the amount of bad debt for the time period described in Subsection (9)(e) exceeds
1462 the amount of the seller's sales that are subject to a tax under this chapter for that same time
1463 period; and
1464 (ii) as provided in Section 59-1-1410 .
1465 (d) A bad debt deduction under this section may not include interest.
1466 (e) A bad debt may be deducted under this Subsection (9) on a return for the time
1467 period during which the bad debt:
1468 (i) is written off as uncollectible in the seller's books and records; and
1469 (ii) would be eligible for a bad debt deduction:
1470 (A) for federal income tax purposes; and
1471 (B) if the seller were required to file a federal income tax return.
1472 (f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
1473 claims a refund under this Subsection (9), the seller shall report and remit a tax under this
1474 chapter:
1475 (i) on the portion of the bad debt the seller recovers; and
1476 (ii) on a return filed for the time period for which the portion of the bad debt is
1477 recovered.
1478 (g) For purposes of reporting a recovery of a portion of bad debt under Subsection
1479 (9)(f), a seller shall apply amounts received on the bad debt in the following order:
1480 (i) in a proportional amount:
1481 (A) to the purchase price of the tangible personal property, product transferred
1482 electronically, or service; and
1483 (B) to the tax due under this chapter on the tangible personal property, product
1484 transferred electronically, or service; and

1485 (ii) to:
1486 (A) interest charges;
1487 (B) service charges; and
1488 (C) other charges.
1489 (h) A seller's certified service provider may make a deduction or claim a refund for bad
1490 debt on behalf of the seller:
1491 (i) in accordance with this Subsection (9); and
1492 (ii) if the certified service provider credits or refunds the entire amount of the bad debt
1493 deduction or refund to the seller.
1494 (i) A seller may allocate bad debt among the states that are members of the agreement
1495 if the seller's books and records support that allocation.
1496 (10) (a) A seller may not, with intent to evade any tax, fail to timely remit the full
1497 amount of tax required by this chapter.
1498 (b) A violation of this section is punishable as provided in Section 59-1-401 .
1499 (c) Each person who fails to pay any tax to the state or any amount of tax required to be
1500 paid to the state, except amounts determined to be due by the commission under Chapter 1,
1501 Part 14, Assessment, Collections, and Refunds Act, or Section 59-12-111 , within the time
1502 required by this chapter, or who fails to file any return as required by this chapter, shall pay, in
1503 addition to the tax, penalties and interest as provided in Section 59-1-401 .
1504 (d) For purposes of prosecution under this section, each quarterly tax period in which a
1505 seller, with intent to evade any tax, collects a tax and fails to timely remit the full amount of the
1506 tax required to be remitted, constitutes a separate offense.
1507 Section 26. Section 59-12-108 is amended to read:
1508 59-12-108. Monthly payment -- Amount of tax a seller may retain -- Penalty --
1509 Certain amounts allocated to local taxing jurisdictions.
1510 (1) (a) Notwithstanding Section 59-12-107 , a seller that has a tax liability under this
1511 chapter of $50,000 or more for the previous calendar year shall:
1512 (i) file a return with the commission:
1513 (A) monthly on or before the last day of the month immediately following the month
1514 for which the seller collects a tax under this chapter; and
1515 (B) for the month for which the seller collects a tax under this chapter; and

1516 (ii) except as provided in Subsection (1)(b), remit with the return required by
1517 Subsection (1)(a)(i) the amount the person is required to remit to the commission for each tax,
1518 fee, or charge described in Subsection (1)(c):
1519 (A) if that seller's tax liability under this chapter for the previous calendar year is less
1520 than $96,000, by any method permitted by the commission; or
1521 (B) if that seller's tax liability under this chapter for the previous calendar year is
1522 $96,000 or more, by electronic funds transfer.
1523 (b) A seller shall remit electronically with the return required by Subsection (1)(a)(i)
1524 the amount the seller is required to remit to the commission for each tax, fee, or charge
1525 described in Subsection (1)(c) if that seller:
1526 (i) is required by Section 59-12-107 to file the return electronically; or
1527 (ii) (A) is required to collect and remit a tax under Subsection 59-12-107 (1)(a); and
1528 (B) files a simplified electronic return.
1529 (c) Subsections (1)(a) and (b) apply to the following taxes, fees, or charges:
1530 (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1531 (ii) a fee under Section 19-6-716 ;
1532 (iii) a fee under Section 19-6-805 ;
1533 (iv) a charge under Section 69-2-5 ;
1534 (v) a charge under Section 69-2-5.5 ;
1535 (vi) a charge under Section 69-2-5.6 ; or
1536 (vii) a tax under this chapter.
1537 (d) Notwithstanding Subsection (1)(a)(ii) and in accordance with Title 63G, Chapter 3,
1538 Utah Administrative Rulemaking Act, the commission shall make rules providing for a method
1539 for making same-day payments other than by electronic funds transfer if making payments by
1540 electronic funds transfer fails.
1541 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1542 commission shall establish by rule procedures and requirements for determining the amount a
1543 seller is required to remit to the commission under this Subsection (1).
1544 (2) (a) Except as provided in Subsection (3), a seller subject to Subsection (1) or a
1545 seller described in Subsection (4) may retain each month the amount allowed by this
1546 Subsection (2).

1547 (b) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain
1548 each month 1.31% of any amounts the seller is required to remit to the commission:
1549 (i) for a transaction described in Subsection 59-12-103 (1) that is subject to a state tax
1550 and a local tax imposed in accordance with the following, for the month for which the seller is
1551 filing a return in accordance with Subsection (1):
1552 (A) Subsection 59-12-103 (2)(a);
1553 (B) Subsection 59-12-103 (2)(b); and
1554 (C) Subsection 59-12-103 (2)(d); and
1555 (ii) for an agreement sales and use tax.
1556 (c) (i) A seller subject to Subsection (1) or a seller described in Subsection (4) may
1557 retain each month the amount calculated under Subsection (2)(c)(ii) for a transaction described
1558 in Subsection 59-12-103 (1) that is subject to the state tax and the local tax imposed in
1559 accordance with Subsection 59-12-103 (2)(c).
1560 (ii) For purposes of Subsection (2)(c)(i), the amount a seller may retain is an amount
1561 equal to the sum of:
1562 (A) 1.31% of any amounts the seller is required to remit to the commission for:
1563 (I) the state tax and the local tax imposed in accordance with Subsection
1564 59-12-103 (2)(c);
1565 (II) the month for which the seller is filing a return in accordance with Subsection (1);
1566 and
1567 (III) an agreement sales and use tax; and
1568 (B) 1.31% of the difference between:
1569 (I) the amounts the seller would have been required to remit to the commission:
1570 (Aa) in accordance with Subsection 59-12-103 (2)(a) if the transaction had been subject
1571 to the state tax and the local tax imposed in accordance with Subsection 59-12-103 (2)(a);
1572 (Bb) for the month for which the seller is filing a return in accordance with Subsection
1573 (1); and
1574 (Cc) for an agreement sales and use tax; and
1575 (II) the amounts the seller is required to remit to the commission for:
1576 (Aa) the state tax and the local tax imposed in accordance with Subsection
1577 59-12-103 (2)(c);

1578 (Bb) the month for which the seller is filing a return in accordance with Subsection (1);
1579 and
1580 (Cc) an agreement sales and use tax.
1581 (d) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain
1582 each month 1% of any amounts the seller is required to remit to the commission:
1583 (i) for the month for which the seller is filing a return in accordance with Subsection
1584 (1); and
1585 (ii) under:
1586 (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1587 (B) Title 17, Chapter 6, County Energy Sales and Use Tax Act;
1588 [(B)] (C) Subsection 59-12-603 (1)(a)(i)(A); or
1589 [(C)] (D) Subsection 59-12-603 (1)(a)(i)(B).
1590 (3) A state government entity that is required to remit taxes monthly in accordance
1591 with Subsection (1) may not retain any amount under Subsection (2).
1592 (4) A seller that has a tax liability under this chapter for the previous calendar year of
1593 less than $50,000 may:
1594 (a) voluntarily meet the requirements of Subsection (1); and
1595 (b) if the seller voluntarily meets the requirements of Subsection (1), retain the
1596 amounts allowed by Subsection (2).
1597 (5) Penalties for late payment shall be as provided in Section 59-1-401 .
1598 (6) (a) Except as provided in Subsection (6)(c), for any amounts required to be remitted
1599 to the commission under this part, the commission shall each month calculate an amount equal
1600 to the difference between:
1601 (i) the total amount retained for that month by all sellers had the percentages listed
1602 under Subsections (2)(b) and (2)(c)(ii) been 1.5%; and
1603 (ii) the total amount retained for that month by all sellers at the percentages listed
1604 under Subsections (2)(b) and (2)(c)(ii).
1605 (b) The commission shall each month allocate the amount calculated under Subsection
1606 (6)(a) to each county, city, and town on the basis of the proportion of agreement sales and use
1607 tax that the commission distributes to each county, city, and town for that month compared to
1608 the total agreement sales and use tax that the commission distributes for that month to all

1609 counties, cities, and towns.
1610 (c) The amount the commission calculates under Subsection (6)(a) may not include an
1611 amount collected from a tax that:
1612 (i) the state imposes within a county, city, or town, including the unincorporated area
1613 of a county; and
1614 (ii) is not imposed within the entire state.
1615 Section 27. Section 59-12-128 is amended to read:
1616 59-12-128. Amnesty.
1617 (1) As used in this section, "amnesty" means that a seller is not required to pay the
1618 following amounts that the seller would otherwise be required to pay:
1619 (a) a tax, fee, or charge under:
1620 (i) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1621 (ii) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
1622 (iii) Title 17, Chapter 50, Part 6, County Energy Sales and Use Tax Act;
1623 (iv) Title 17, Chapter 50, Part 7, County Telecommunications License Tax Act;
1624 [(iii)] (v) Section 19-6-714 ;
1625 [(iv)] (vi) Section 19-6-805 ;
1626 [(v)] (vii) Section 69-2-5 ;
1627 [(vi)] (viii) Section 69-2-5.5 ;
1628 [(vii)] (ix) Section 69-2-5.6 ; or
1629 [(viii)] (x) this chapter;
1630 (b) a penalty on a tax, fee, or charge described in Subsection (1)(a); or
1631 (c) interest on a tax, fee, or charge described in Subsection (1)(a).
1632 (2) The commission shall grant a seller amnesty under this section if the seller:
1633 (a) was not licensed under Section 59-12-106 at any time during the 12-month period
1634 prior to the effective date of the state's participation in the agreement;
1635 (b) obtains a license under Section 59-12-106 within a 12-month period after the
1636 effective date of the state's participation in the agreement; and
1637 (c) is registered under the agreement.
1638 (3) A seller may not receive amnesty under this section for a tax, fee, or charge:
1639 (a) the seller collects;

1640 (b) the seller remits to the commission;
1641 (c) that the seller is required to remit to the commission on the seller's purchase; or
1642 (d) arising from a transaction that occurs within a time period that is under audit by the
1643 commission if:
1644 (i) the seller receives notice of the commencement of the audit prior to obtaining a
1645 license under Section 59-12-106 ; and
1646 (ii) (A) the audit described in Subsection (3)(d)(i) is not complete; or
1647 (B) the seller has not exhausted all administrative and judicial remedies in connection
1648 with the audit described in Subsection (3)(d)(i).
1649 (4) (a) Except as provided in Subsection (4)(b), amnesty the commission grants to a
1650 seller under this section:
1651 (i) applies to the time period during which the seller is not licensed under Section
1652 59-12-106 ; and
1653 (ii) remains in effect if, for a period of three years, the seller:
1654 (A) remains registered under the agreement;
1655 (B) collects a tax, fee, or charge on a transaction subject to a tax, fee, or charge
1656 described in Subsection (1)(a); and
1657 (C) remits to the commission the taxes, fees, and charges the seller collects in
1658 accordance with Subsection (4)(a)(ii)(B).
1659 (b) The commission may not grant a seller amnesty under this section if, with respect
1660 to a tax, fee, or charge for which the seller would otherwise be granted amnesty under this
1661 section, the seller commits:
1662 (i) fraud; or
1663 (ii) an intentional misrepresentation of a material fact.
1664 (5) (a) If a seller does not meet a requirement of Subsection (4)(a)(ii), the commission
1665 shall require the seller to pay the amounts described in Subsection (1) that the seller would
1666 have otherwise been required to pay.
1667 (b) Notwithstanding Section 59-1-1410 , for purposes of requiring a seller to pay an
1668 amount in accordance with Subsection (5)(a), the time period for the commission to make an
1669 assessment under Section 59-1-1410 is extended for a time period beginning on the date the
1670 seller does not meet a requirement of Subsection (4)(a)(ii) and ends three years after that date.

1671 Section 28. Section 72-7-102 is amended to read:
1672 72-7-102. Excavations, structures, or objects prohibited within right-of-way
1673 except in accordance with law -- Permit and fee requirements -- Rulemaking -- Penalty
1674 for violation.
1675 (1) As used in this section, "management costs" means the reasonable, direct, and
1676 actual costs a highway authority incurs in exercising authority over the highways under its
1677 jurisdiction.
1678 (2) Except as provided in Subsection (3) and Section 54-4-15 , a person may not:
1679 (a) dig or excavate, within the right-of-way of any state highway, county road, or city
1680 street; or
1681 (b) place, construct, or maintain any approach road, driveway, pole, pipeline, conduit,
1682 sewer, ditch, culvert, billboard, advertising sign, or any other structure or object of any kind or
1683 character within the right-of-way.
1684 (3) (a) A highway authority having jurisdiction over the right-of-way may allow
1685 excavating, installation of utilities and other facilities or access under rules made by the
1686 highway authority and in compliance with federal, state, and local law as applicable.
1687 (b) (i) The rules may require a permit for any excavation or installation and may
1688 require a surety bond or other security.
1689 (ii) The application for a permit for excavation or installation on a state highway shall
1690 be accompanied by a fee established under Subsection (4)(f).
1691 (iii) The permit may be revoked and the surety bond or other security may be forfeited
1692 for cause.
1693 (4) (a) Except as provided in Section 72-7-108 with respect to the department
1694 concerning the interstate highway system, a highway authority may require compensation from
1695 a utility service provider for access to the right-of-way of a highway only as provided in this
1696 section.
1697 (b) A highway authority may recover from a utility service provider, only those
1698 management costs caused by the utility service provider's activities in the right-of-way of a
1699 highway under the jurisdiction of the highway authority.
1700 (c) (i) A fee or other compensation under this Subsection (4) shall be imposed on a
1701 competitively neutral basis.

1702 (ii) If a highway authority's management costs cannot be attributed to only one entity,
1703 the management costs shall be allocated among all privately owned and government agencies
1704 using the highway right-of-way for utility service purposes, including the highway authority
1705 itself. The allocation shall reflect proportionately the management costs incurred by the
1706 highway authority as a result of the various utility uses of the highway.
1707 (d) A highway authority may not use the compensation authority granted under this
1708 Subsection (4) as a basis for generating revenue for the highway authority that is in addition to
1709 its management costs.
1710 (e) (i) A utility service provider that is assessed management costs or a franchise fee by
1711 a highway authority is entitled to recover those management costs.
1712 (ii) If the highway authority that assesses the management costs or franchise fees is a
1713 political subdivision of the state and the utility service provider serves customers within the
1714 boundaries of that highway authority, the management costs may be recovered from those
1715 customers.
1716 (f) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1717 department shall adopt a schedule of fees to be assessed for management costs incurred in
1718 connection with issuing and administering a permit on a state highway under this section.
1719 (g) In addition to the requirements of this Subsection (4), a telecommunications tax or
1720 fee imposed:
1721 (i) by a municipality on a telecommunications provider, as defined in Section
1722 10-1-402 , is subject to Section 10-1-406 [.]; or
1723 (ii) by a county on a telecommunications provider, as defined in Section 17-50-702 , is
1724 subject to Section 17-50-706 .
1725 (5) Permit fees collected by the department under this section shall be deposited with
1726 the state treasurer and credited to the Transportation Fund.
1727 (6) Nothing in this section shall affect the authority of:
1728 (a) a municipality under:
1729 [(a)] (i) Section 10-1-203 ;
1730 [(b)] (ii) Section 11-26-1 ;
1731 [(c)] (iii) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act; or
1732 [(d)] (iv) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax

1733 Act[.]; or
1734 (b) a county under:
1735 (i) Title 17, Chapter 50, Part 6, County Energy Sales and Use Tax Act; or
1736 (ii) Title 17, Chapter 50, Part 7, County Telecommunications License Tax Act.
1737 (7) A person who violates the provisions of Subsection (2) is guilty of a class B
1738 misdemeanor.
1739 Section 29. Section 72-7-108 is amended to read:
1740 72-7-108. Longitudinal telecommunication access in the interstate highway
1741 system -- Definitions -- Agreements -- Compensation -- Restrictions -- Rulemaking.
1742 (1) As used in this section:
1743 (a) "Longitudinal access" means access to or use of any part of a right-of-way of a
1744 highway on the interstate system that extends generally parallel to the right-of-way for a total of
1745 30 or more linear meters.
1746 (b) "Statewide telecommunications purposes" means the further development of the
1747 statewide network that meets the telecommunications needs of state agencies and enhances the
1748 learning purposes of higher and public education.
1749 (c) "Telecommunication facility" means any telecommunication cable, line, fiber, wire,
1750 conduit, innerduct, access manhole, handhole, tower, hut, pedestal, pole, box, transmitting
1751 equipment, receiving equipment, power equipment, or other equipment, system, and device
1752 used to transmit, receive, produce, or distribute via wireless, wireline, electronic, or optical
1753 signal for communication purposes.
1754 (2) (a) Except as provided in Subsection (4), the department may allow a
1755 telecommunication facility provider longitudinal access to the right-of-way of a highway on the
1756 interstate system for the installation, operation, and maintenance of a telecommunication
1757 facility.
1758 (b) The department shall enter into an agreement with a telecommunication facility
1759 provider and issue a permit before granting it any longitudinal access under this section.
1760 (i) Except as specifically provided by the agreement, a property interest in a
1761 right-of-way may not be granted under the provisions of this section.
1762 (ii) An agreement entered into by the department under this section shall:
1763 (A) specify the terms and conditions for the renegotiation of the agreement;

1764 (B) specify maintenance responsibilities for each telecommunication facility;
1765 (C) be nonexclusive; and
1766 (D) be limited to a maximum term of 30 years.
1767 (3) (a) The department shall require compensation from a telecommunication facility
1768 provider under this section for longitudinal access to the right-of-way of a highway on the
1769 interstate system.
1770 (b) The compensation charged shall be:
1771 (i) fair and reasonable;
1772 (ii) competitively neutral;
1773 (iii) nondiscriminatory;
1774 (iv) open to public inspection;
1775 (v) established to promote access by multiple telecommunication facility providers;
1776 (vi) established for zones of the state, with zones determined based upon factors that
1777 include population density, distance, numbers of telecommunication subscribers, and the
1778 impact upon private right-of-way users;
1779 (vii) established to encourage the deployment of digital infrastructure within the state;
1780 (viii) set after the department conducts a market analysis to determine the fair and
1781 reasonable values of the right-of-way based upon adjacent property values;
1782 (ix) a lump sum payment or annual installment, at the option of the
1783 telecommunications facility provider; and
1784 (x) set in accordance with Subsection (3)(f).
1785 (c) (i) The compensation charged may be cash, in-kind compensation, or a combination
1786 of cash and in-kind compensation.
1787 (ii) In-kind compensation requires the agreement of both the telecommunication
1788 facility provider and the department.
1789 (iii) The department shall, in consultation with the Telecommunications Advisory
1790 Council created in Section 72-7-109 , determine the present value of any in-kind compensation
1791 based upon the incremental cost to the telecommunication facility provider.
1792 (iv) The value of in-kind compensation or a combination of cash and in-kind
1793 compensation shall be equal to or greater than the amount of cash compensation that would be
1794 charged if the compensation is cash only.

1795 (d) (i) The department shall provide for the proportionate sharing of costs among the
1796 department and telecommunications providers for joint trenching or trench sharing based on
1797 the amount of conduit innerduct space that is authorized in the agreement for the trench.
1798 (ii) If two or more telecommunications facility providers are required to share a single
1799 trench, each telecommunications facility provider in the trench shall share the cost and benefits
1800 of the trench in accordance with Subsection (3)(d)(i) on a fair, reasonable, competitively
1801 neutral, and nondiscriminatory basis.
1802 (e) The market analysis under Subsection (3)(b)(viii) shall be conducted at least every
1803 five years and any adjustments warranted shall apply only to agreements entered after the date
1804 of the new market analysis.
1805 (f) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1806 department shall establish a schedule of rates of compensation for any longitudinal access
1807 granted under this section.
1808 (4) The department may not grant any longitudinal access under this section that results
1809 in a significant compromise of the safe, efficient, and convenient use of the interstate system
1810 for the traveling public.
1811 (5) The department may not pay any cost of relocation of a telecommunication facility
1812 granted longitudinal access to the right-of-way of a highway on the interstate system under this
1813 section.
1814 (6) (a) Monetary compensation collected by the department in accordance with this
1815 section shall be deposited with the state treasurer and credited to the Transportation Fund.
1816 (b) Any telecommunications capacity acquired as in-kind compensation shall be used:
1817 (i) exclusively for statewide telecommunications purposes and may not be sold or
1818 leased in competition with telecommunication or Internet service providers; and
1819 (ii) as determined by the department after consultation with the Telecommunications
1820 Advisory Council created in Section 72-7-109 .
1821 (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1822 department shall make rules:
1823 (a) governing the installation, operation, and maintenance of a telecommunication
1824 facility granted longitudinal access under this section;
1825 (b) specifying the procedures for establishing an agreement for longitudinal access for

1826 a telecommunication facility provider;
1827 (c) providing for the relocation or removal of a telecommunication facility for:
1828 (i) needed changes to a highway on the interstate system;
1829 (ii) expiration of an agreement; or
1830 (iii) a breach of an agreement; and
1831 (d) providing an opportunity for all interested providers to apply for access within open
1832 right-of-way segments.
1833 (8) (a) Except for a right-of-way of a highway on the interstate system, nothing in this
1834 section shall be construed to allow a highway authority to require compensation from a
1835 telecommunication facility provider for longitudinal access to the right-of-way of a highway
1836 under the highway authority's jurisdiction.
1837 (b) Nothing in this section shall affect the authority of a municipality under:
1838 (i) Section 10-1-203 ;
1839 (ii) Section 11-26-1 ;
1840 (iii) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act; or
1841 (iv) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act.
1842 (c) Nothing in this section shall affect the authority of a county under:
1843 (i) Title 17, Chapter 50, Part 6, County Energy Sales and Use Tax Act; or
1844 (ii) Title 17, Chapter 50, Part 7, County Telecommunications License Tax Act.
1845 (9) Compensation paid to the department under Subsection (3) may not be used by any
1846 person as evidence of the market or other value of the access for any other purpose, including
1847 condemnation proceedings, other litigation, or the application of rates of taxation or the
1848 establishment of franchise fees relating to longitudinal access rights.




Legislative Review Note
as of 2-11-11 7:38 AM

Office of Legislative Research and General Counsel