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H.B. 157 Enrolled

             1     

CURRENCY AMENDMENTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Brad J. Galvez

             5     
Senate Sponsor: John L. Valentine

             6      Cosponsors:
             7      Fred C. Cox
             8      Bradley M. Daw
             9      Brad L. Dee
             10      John Dougall
             11      Craig A. Frank
             12      Gage Froerer
             13      Richard A. Greenwood
             14      Keith GroverChristopher N. Herrod
Gregory H. Hughes
Eric K. Hutchings
Ken Ivory
Michael T. Morley
Michael E. Noel
Curtis Oda
Patrick Painter
Jeremy A. PetersonDixon M. Pitcher
Douglas Sagers
Stephen E. Sandstrom
Dean Sanpei
Ryan D. Wilcox
Brad R. Wilson
Bill Wright              15     
             16      LONG TITLE
             17      General Description:
             18          This bill amends provisions related to currency.
             19      Highlighted Provisions:
             20          This bill:
             21          .    exempts specie legal tender from the Pawnshop and Secondhand Merchandise
             22      Transaction Information Act;
             23          .    addresses provisions related to specie legal tender, including:
             24              .    renaming the Legal Tender Act to the Specie Legal Tender Act;
             25              .    defining "specie legal tender" to mean gold or silver coin issued by the United
             26      States or certain other gold or silver coin if authorized by a court of competent
             27      jurisdiction or Congress;
             28              .    providing that specie legal tender is legal tender in the state;


             29              .    providing that a person may not compel another person to tender or accept
             30      specie legal tender except as expressly provided by contract;
             31              .    repealing obsolete language;
             32              .    requiring the attorney general to enforce the Specie Legal Tender Act; and
             33              .    providing a severability clause;
             34          .    addresses an income tax credit for certain capital gains on a transaction involving
             35      legal tender;
             36          .    addresses a sales and use tax exemption for certain currency or coins;
             37          .    addresses the remittance of sales and use taxes on certain transactions involving
             38      specie legal tender; and
             39          .    makes technical and conforming changes.
             40      Money Appropriated in this Bill:
             41          None
             42      Other Special Clauses:
             43          This bill provides an effective date.
             44          This bill provides for retrospective operation.
             45      Utah Code Sections Affected:
             46      AMENDS:
             47          13-32a-103.5, as enacted by Laws of Utah 2009, Chapter 272
             48          59-1-1501, as enacted by Laws of Utah 2011, Chapter 302
             49          59-1-1502, as enacted by Laws of Utah 2011, Chapter 302
             50          59-1-1503, as enacted by Laws of Utah 2011, Chapter 302
             51          59-10-1028, as enacted by Laws of Utah 2011, Chapter 302
             52          59-12-104, as last amended by Laws of Utah 2011, Chapters 288, 314, 370, and 391
             53          59-12-107, as last amended by Laws of Utah 2009, Chapter 212
             54      ENACTS:
             55          59-1-1501.1, Utah Code Annotated 1953
             56          59-1-1505, Utah Code Annotated 1953


             57          59-1-1506, Utah Code Annotated 1953
             58      REPEALS:
             59          59-1-1504, as enacted by Laws of Utah 2011, Chapter 302
             60     
             61      Be it enacted by the Legislature of the state of Utah:
             62          Section 1. Section 13-32a-103.5 is amended to read:
             63           13-32a-103.5. Applicability to coin dealers -- Specie legal tender exempt from
             64      chapter.
             65          (1) This chapter applies to coin dealers, except:
             66          (a) where provisions otherwise specifically address coin dealers[.]; or
             67          (b) as provided in Subsection (2).
             68          (2) Specie legal tender as defined in Section 59-1-1501.1 that is used as legal tender is
             69      exempt from this chapter.
             70          Section 2. Section 59-1-1501 is amended to read:
             71     
Part 15. Specie Legal Tender Act

             72           59-1-1501. Title.
             73          This part is known as the "Specie Legal Tender Act."
             74          Section 3. Section 59-1-1501.1 is enacted to read:
             75          59-1-1501.1. Definitions.
             76          Subject to Subsection 59-1-1502 (3), as used in this part, "specie legal tender" means
             77      gold or silver coin that is issued by the United States.
             78          Section 4. Section 59-1-1502 is amended to read:
             79           59-1-1502. Specie legal tender is legal tender in the state -- Person may not
             80      compel another person to tender or accept specie legal tender -- Court or congressional
             81      action to authorize gold or silver coin or bullion as legal tender.
             82          (1) [Gold and silver coin issued by the federal government] Specie legal tender is legal
             83      tender in the state.
             84          (2) [A] Except as expressly provided by contract, a person may not compel any other


             85      person to tender or accept [gold and silver coin that is issued by the federal government] specie
             86      legal tender.
             87          (3) Gold or silver coin or bullion, other than gold or silver coin that is issued by the
             88      United States, is considered to be specie legal tender and is legal tender in the state if:
             89          (a) a court of competent jurisdiction issues a final, unappealable judgment or order
             90      determining that the state may recognize the gold or silver coin or bullion, other than gold or
             91      silver coin that is issued by the United States, as legal tender in the state; or
             92          (b) Congress enacts legislation that:
             93          (i) expressly provides that the gold or silver coin or bullion, other than gold or silver
             94      coin that is issued by the United States, is legal tender in the state; or
             95          (ii) expressly allows the state to recognize the gold or silver coin or bullion, other than
             96      gold or silver coin that is issued by the United States, as legal tender in the state.
             97          Section 5. Section 59-1-1503 is amended to read:
             98           59-1-1503. Nonrefundable credit -- Sales and use tax exemption -- Sales and use
             99      tax remittance.
             100          [(1) There is a nonrefundable credit established for any capital gains incurred from the
             101      exchange of gold and silver coin issued by the federal government for another form of legal
             102      tender as provided in Section 59-10-1028 .]
             103          (1) A nonrefundable individual income tax credit is allowed as provided in Section
             104      59-10-1028 related to a capital gain on a transaction involving the exchange of one form of
             105      legal tender for another form of legal tender.
             106          (2) [The exchange of gold and silver coin issued by the federal government for another
             107      form of legal tender is] Sales of currency or coin are exempt from sales and use taxes as
             108      provided in Subsection 59-12-104 (50).
             109          (3) The remittance of a sales and use tax on a transaction involving specie legal tender
             110      is as provided in Section 59-12-107 .
             111          Section 6. Section 59-1-1505 is enacted to read:
             112          59-1-1505. Attorney general to enforce part.


             113          The attorney general shall enforce this part.
             114          Section 7. Section 59-1-1506 is enacted to read:
             115          59-1-1506. Severability clause.
             116          If any provision of this part or the application of any provision to any person or
             117      circumstance is held invalid by a final decision of a court of competent jurisdiction, the
             118      remainder of this part shall be given effect without the invalid provision or application. The
             119      provisions of this part are severable.
             120          Section 8. Section 59-10-1028 is amended to read:
             121           59-10-1028. Nonrefundable tax credit for capital gain transactions on the
             122      exchange of one form of legal tender for another form of legal tender.
             123          (1) As used in this section:
             124          (a) "Capital gain transaction" means a transaction that results in a:
             125          (i) short-term capital gain; or
             126          (ii) long-term capital gain.
             127          (b) "Long-term capital gain" is as defined in Section 1222, Internal Revenue Code.
             128          (c) "Long-term capital loss" is as defined in Section 1222, Internal Revenue Code.
             129          (d) "Net capital gain" means the amount by which the sum of long-term capital gains
             130      and short-term capital gains on a claimant's, estate's, or trust's transactions from exchanges
             131      made for a taxable year of one form of legal tender for another form of legal tender exceeds the
             132      sum of long-term capital losses and short-term capital losses on those transactions for that
             133      taxable year.
             134          (e) "Short-term capital loss" is as defined in Section 1222, Internal Revenue Code.
             135          [(c)] (f) "Short-term capital gain" is as defined in Section 1222, Internal Revenue Code.
             136          (2) Except as provided in Section 59-10-1002.2 , for taxable years beginning on or after
             137      January 1, 2012, a claimant, estate, or trust may claim a nonrefundable tax credit equal to the
             138      product of:
             139          (a) [to the extent a capital gain is not offset by a capital loss under Chapter 1,
             140      Subchapter P, Capital Gains and Losses, Internal Revenue Code, the total] to the extent a net


             141      capital gain is included in taxable income, the amount of the claimant's, estate's, or trust's
             142      [short-term capital gain or long-term] net capital gain on [a] capital gain [transaction]
             143      transactions from [an exchange] exchanges made on or after January 1, 2012, [of gold or silver
             144      coin issued by the federal government] for a taxable year, of one form of legal tender for
             145      another form of legal tender; and
             146          (b) 5%.
             147          (3) A claimant, estate, or trust may not carry forward or carry back a tax credit under
             148      this section.
             149          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             150      commission may make rules to implement this section.
             151          Section 9. Section 59-12-104 is amended to read:
             152           59-12-104. Exemptions.
             153          The following sales and uses are exempt from the taxes imposed by this chapter:
             154          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             155      under Chapter 13, Motor and Special Fuel Tax Act;
             156          (2) subject to Section 59-12-104.6 , sales to the state, its institutions, and its political
             157      subdivisions; however, this exemption does not apply to sales of:
             158          (a) construction materials except:
             159          (i) construction materials purchased by or on behalf of institutions of the public
             160      education system as defined in Utah Constitution Article X, Section 2, provided the
             161      construction materials are clearly identified and segregated and installed or converted to real
             162      property which is owned by institutions of the public education system; and
             163          (ii) construction materials purchased by the state, its institutions, or its political
             164      subdivisions which are installed or converted to real property by employees of the state, its
             165      institutions, or its political subdivisions; or
             166          (b) tangible personal property in connection with the construction, operation,
             167      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             168      providing additional project capacity, as defined in Section 11-13-103 ;


             169          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             170          (i) the proceeds of each sale do not exceed $1; and
             171          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             172      the cost of the item described in Subsection (3)(b) as goods consumed; and
             173          (b) Subsection (3)(a) applies to:
             174          (i) food and food ingredients; or
             175          (ii) prepared food;
             176          (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
             177          (i) alcoholic beverages;
             178          (ii) food and food ingredients; or
             179          (iii) prepared food;
             180          (b) sales of tangible personal property or a product transferred electronically:
             181          (i) to a passenger;
             182          (ii) by a commercial airline carrier; and
             183          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
             184          (c) services related to Subsection (4)(a) or (b);
             185          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
             186      and equipment:
             187          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
             188      North American Industry Classification System of the federal Executive Office of the
             189      President, Office of Management and Budget; and
             190          (II) for:
             191          (Aa) installation in an aircraft, including services relating to the installation of parts or
             192      equipment in the aircraft;
             193          (Bb) renovation of an aircraft; or
             194          (Cc) repair of an aircraft; or
             195          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
             196      commerce; or


             197          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
             198      aircraft operated by a common carrier in interstate or foreign commerce; and
             199          (b) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             200      a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
             201      refund:
             202          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
             203          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
             204          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
             205      the sale prior to filing for the refund;
             206          (iv) for sales and use taxes paid under this chapter on the sale;
             207          (v) in accordance with Section 59-1-1410 ; and
             208          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             209      the person files for the refund on or before September 30, 2011;
             210          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             211      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             212      exhibitor, distributor, or commercial television or radio broadcaster;
             213          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             214      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             215      washing of tangible personal property;
             216          (b) if a seller that sells at the same business location assisted cleaning or washing of
             217      tangible personal property and cleaning or washing of tangible personal property that is not
             218      assisted cleaning or washing of tangible personal property, the exemption described in
             219      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             220      or washing of the tangible personal property; and
             221          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
             222      Utah Administrative Rulemaking Act, the commission may make rules:
             223          (i) governing the circumstances under which sales are at the same business location;
             224      and


             225          (ii) establishing the procedures and requirements for a seller to separately account for
             226      sales of assisted cleaning or washing of tangible personal property;
             227          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             228      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             229      fulfilled;
             230          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             231      this state if the vehicle is:
             232          (a) not registered in this state; and
             233          (b) (i) not used in this state; or
             234          (ii) used in this state:
             235          (A) if the vehicle is not used to conduct business, for a time period that does not
             236      exceed the longer of:
             237          (I) 30 days in any calendar year; or
             238          (II) the time period necessary to transport the vehicle to the borders of this state; or
             239          (B) if the vehicle is used to conduct business, for the time period necessary to transport
             240      the vehicle to the borders of this state;
             241          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             242          (i) the item is intended for human use; and
             243          (ii) (A) a prescription was issued for the item; or
             244          (B) the item was purchased by a hospital or other medical facility; and
             245          (b) (i) Subsection (10)(a) applies to:
             246          (A) a drug;
             247          (B) a syringe; or
             248          (C) a stoma supply; and
             249          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             250      commission may by rule define the terms:
             251          (A) "syringe"; or
             252          (B) "stoma supply";


             253          (11) sales or use of property, materials, or services used in the construction of or
             254      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             255          (12) (a) sales of an item described in Subsection (12)(c) served by:
             256          (i) the following if the item described in Subsection (12)(c) is not available to the
             257      general public:
             258          (A) a church; or
             259          (B) a charitable institution;
             260          (ii) an institution of higher education if:
             261          (A) the item described in Subsection (12)(c) is not available to the general public; or
             262          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             263      offered by the institution of higher education; or
             264          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             265          (i) a medical facility; or
             266          (ii) a nursing facility; and
             267          (c) Subsections (12)(a) and (b) apply to:
             268          (i) food and food ingredients;
             269          (ii) prepared food; or
             270          (iii) alcoholic beverages;
             271          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             272      or a product transferred electronically by a person:
             273          (i) regardless of the number of transactions involving the sale of that tangible personal
             274      property or product transferred electronically by that person; and
             275          (ii) not regularly engaged in the business of selling that type of tangible personal
             276      property or product transferred electronically;
             277          (b) this Subsection (13) does not apply if:
             278          (i) the sale is one of a series of sales of a character to indicate that the person is
             279      regularly engaged in the business of selling that type of tangible personal property or product
             280      transferred electronically;


             281          (ii) the person holds that person out as regularly engaged in the business of selling that
             282      type of tangible personal property or product transferred electronically;
             283          (iii) the person sells an item of tangible personal property or product transferred
             284      electronically that the person purchased as a sale that is exempt under Subsection (25); or
             285          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             286      this state in which case the tax is based upon:
             287          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             288      sold; or
             289          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             290      value of the vehicle or vessel being sold at the time of the sale as determined by the
             291      commission; and
             292          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             293      commission shall make rules establishing the circumstances under which:
             294          (i) a person is regularly engaged in the business of selling a type of tangible personal
             295      property or product transferred electronically;
             296          (ii) a sale of tangible personal property or a product transferred electronically is one of
             297      a series of sales of a character to indicate that a person is regularly engaged in the business of
             298      selling that type of tangible personal property or product transferred electronically; or
             299          (iii) a person holds that person out as regularly engaged in the business of selling a type
             300      of tangible personal property or product transferred electronically;
             301          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             302      July 1, 2006, for a purchase or lease by a manufacturing facility except for a cogeneration
             303      facility, of the following:
             304          (i) machinery and equipment that:
             305          (A) are used:
             306          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             307      recycler described in Subsection 59-12-102 (55)(b):
             308          (Aa) in the manufacturing process;


             309          (Bb) to manufacture an item sold as tangible personal property; and
             310          (Cc) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             311      (14)(a)(i)(A)(I) in the state; or
             312          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             313      59-12-102 (55)(b):
             314          (Aa) to process an item sold as tangible personal property; and
             315          (Bb) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             316      (14)(a)(i)(A)(II) in the state; and
             317          (B) have an economic life of three or more years; and
             318          (ii) normal operating repair or replacement parts that:
             319          (A) have an economic life of three or more years; and
             320          (B) are used:
             321          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             322      recycler described in Subsection 59-12-102 (55)(b):
             323          (Aa) in the manufacturing process; and
             324          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(I) in the
             325      state; or
             326          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             327      59-12-102 (55)(b):
             328          (Aa) to process an item sold as tangible personal property; and
             329          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(II) in the
             330      state;
             331          (b) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             332      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             333      of the following:
             334          (i) machinery and equipment that:
             335          (A) are used:
             336          (I) in the manufacturing process;


             337          (II) to manufacture an item sold as tangible personal property; and
             338          (III) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             339      (14)(b) in the state; and
             340          (B) have an economic life of three or more years; and
             341          (ii) normal operating repair or replacement parts that:
             342          (A) are used:
             343          (I) in the manufacturing process; and
             344          (II) in a manufacturing facility described in this Subsection (14)(b) in the state; and
             345          (B) have an economic life of three or more years;
             346          (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
             347      by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
             348      NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
             349      Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
             350      of the 2002 North American Industry Classification System of the federal Executive Office of
             351      the President, Office of Management and Budget, of the following:
             352          (i) machinery and equipment that:
             353          (A) are used:
             354          (I) (Aa) in the production process, other than the production of real property; or
             355          (Bb) in research and development; and
             356          (II) beginning on July 1, 2009, in an establishment described in this Subsection (14)(c)
             357      in the state; and
             358          (B) have an economic life of three or more years; and
             359          (ii) normal operating repair or replacement parts that:
             360          (A) have an economic life of three or more years; and
             361          (B) are used in:
             362          (I) (Aa) the production process, except for the production of real property; and
             363          (Bb) an establishment described in this Subsection (14)(c) in the state; or
             364          (II) (Aa) research and development; and


             365          (Bb) in an establishment described in this Subsection (14)(c) in the state;
             366          (d) (i) amounts paid or charged for a purchase or lease made on or after July 1, 2010,
             367      but on or before June 30, 2014, by an establishment described in NAICS Code 518112, Web
             368      Search Portals, of the 2002 North American Industry Classification System of the federal
             369      Executive Office of the President, Office of Management and Budget, of the following:
             370          (A) machinery and equipment that:
             371          (I) are used in the operation of the web search portal;
             372          (II) have an economic life of three or more years; and
             373          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             374      in the state; and
             375          (B) normal operating repair or replacement parts that:
             376          (I) are used in the operation of the web search portal;
             377          (II) have an economic life of three or more years; and
             378          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             379      in the state; or
             380          (ii) amounts paid or charged for a purchase or lease made on or after July 1, 2014, by
             381      an establishment described in NAICS Code 518112, Web Search Portals, of the 2002 North
             382      American Industry Classification System of the federal Executive Office of the President,
             383      Office of Management and Budget, of the following:
             384          (A) machinery and equipment that:
             385          (I) are used in the operation of the web search portal; and
             386          (II) have an economic life of three or more years; and
             387          (B) normal operating repair or replacement parts that:
             388          (I) are used in the operation of the web search portal; and
             389          (II) have an economic life of three or more years;
             390          (e) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
             391      Utah Administrative Rulemaking Act, the commission:
             392          (i) shall by rule define the term "establishment"; and


             393          (ii) may by rule define what constitutes:
             394          (A) processing an item sold as tangible personal property;
             395          (B) the production process, except for the production of real property;
             396          (C) research and development; or
             397          (D) a new or expanding establishment described in Subsection (14)(d) in the state; and
             398          (f) on or before October 1, 2011, and every five years after October 1, 2011, the
             399      commission shall:
             400          (i) review the exemptions described in this Subsection (14) and make
             401      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             402      exemptions should be continued, modified, or repealed; and
             403          (ii) include in its report:
             404          (A) an estimate of the cost of the exemptions;
             405          (B) the purpose and effectiveness of the exemptions; and
             406          (C) the benefits of the exemptions to the state;
             407          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             408          (i) tooling;
             409          (ii) special tooling;
             410          (iii) support equipment;
             411          (iv) special test equipment; or
             412          (v) parts used in the repairs or renovations of tooling or equipment described in
             413      Subsections (15)(a)(i) through (iv); and
             414          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             415          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             416      performance of any aerospace or electronics industry contract with the United States
             417      government or any subcontract under that contract; and
             418          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             419      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             420      by:


             421          (A) a government identification tag placed on the tooling, equipment, or parts; or
             422          (B) listing on a government-approved property record if placing a government
             423      identification tag on the tooling, equipment, or parts is impractical;
             424          (16) sales of newspapers or newspaper subscriptions;
             425          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
             426      product transferred electronically traded in as full or part payment of the purchase price, except
             427      that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
             428      trade-ins are limited to other vehicles only, and the tax is based upon:
             429          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             430      vehicle being traded in; or
             431          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             432      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             433      commission; and
             434          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             435      following items of tangible personal property or products transferred electronically traded in as
             436      full or part payment of the purchase price:
             437          (i) money;
             438          (ii) electricity;
             439          (iii) water;
             440          (iv) gas; or
             441          (v) steam;
             442          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             443      or a product transferred electronically used or consumed primarily and directly in farming
             444      operations, regardless of whether the tangible personal property or product transferred
             445      electronically:
             446          (A) becomes part of real estate; or
             447          (B) is installed by a:
             448          (I) farmer;


             449          (II) contractor; or
             450          (III) subcontractor; or
             451          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
             452      product transferred electronically if the tangible personal property or product transferred
             453      electronically is exempt under Subsection (18)(a)(i); and
             454          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following are
             455      subject to the taxes imposed by this chapter:
             456          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
             457      incidental to farming:
             458          (I) machinery;
             459          (II) equipment;
             460          (III) materials; or
             461          (IV) supplies; and
             462          (B) tangible personal property that is considered to be used in a manner that is
             463      incidental to farming includes:
             464          (I) hand tools; or
             465          (II) maintenance and janitorial equipment and supplies;
             466          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
             467      transferred electronically if the tangible personal property or product transferred electronically
             468      is used in an activity other than farming; and
             469          (B) tangible personal property or a product transferred electronically that is considered
             470      to be used in an activity other than farming includes:
             471          (I) office equipment and supplies; or
             472          (II) equipment and supplies used in:
             473          (Aa) the sale or distribution of farm products;
             474          (Bb) research; or
             475          (Cc) transportation; or
             476          (iii) a vehicle required to be registered by the laws of this state during the period


             477      ending two years after the date of the vehicle's purchase;
             478          (19) sales of hay;
             479          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             480      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             481      garden, farm, or other agricultural produce is sold by:
             482          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             483      agricultural produce;
             484          (b) an employee of the producer described in Subsection (20)(a); or
             485          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             486          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             487      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             488          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             489      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             490      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             491      manufacturer, processor, wholesaler, or retailer;
             492          (23) a product stored in the state for resale;
             493          (24) (a) purchases of a product if:
             494          (i) the product is:
             495          (A) purchased outside of this state;
             496          (B) brought into this state:
             497          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             498          (II) by a nonresident person who is not living or working in this state at the time of the
             499      purchase;
             500          (C) used for the personal use or enjoyment of the nonresident person described in
             501      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             502          (D) not used in conducting business in this state; and
             503          (ii) for:
             504          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of


             505      the product for a purpose for which the product is designed occurs outside of this state;
             506          (B) a boat, the boat is registered outside of this state; or
             507          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             508      outside of this state;
             509          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             510          (i) a lease or rental of a product; or
             511          (ii) a sale of a vehicle exempt under Subsection (33); and
             512          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             513      purposes of Subsection (24)(a), the commission may by rule define what constitutes the
             514      following:
             515          (i) conducting business in this state if that phrase has the same meaning in this
             516      Subsection (24) as in Subsection (63);
             517          (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
             518      as in Subsection (63); or
             519          (iii) a purpose for which a product is designed if that phrase has the same meaning in
             520      this Subsection (24) as in Subsection (63);
             521          (25) a product purchased for resale in this state, in the regular course of business, either
             522      in its original form or as an ingredient or component part of a manufactured or compounded
             523      product;
             524          (26) a product upon which a sales or use tax was paid to some other state, or one of its
             525      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             526      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             527      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             528      Act;
             529          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             530      person for use in compounding a service taxable under the subsections;
             531          (28) purchases made in accordance with the special supplemental nutrition program for
             532      women, infants, and children established in 42 U.S.C. Sec. 1786;


             533          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             534      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             535      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             536      Manual of the federal Executive Office of the President, Office of Management and Budget;
             537          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             538      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
             539          (a) not registered in this state; and
             540          (b) (i) not used in this state; or
             541          (ii) used in this state:
             542          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
             543      time period that does not exceed the longer of:
             544          (I) 30 days in any calendar year; or
             545          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             546      the borders of this state; or
             547          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             548      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             549      state;
             550          (31) sales of aircraft manufactured in Utah;
             551          (32) amounts paid for the purchase of telecommunications service for purposes of
             552      providing telecommunications service;
             553          (33) sales, leases, or uses of the following:
             554          (a) a vehicle by an authorized carrier; or
             555          (b) tangible personal property that is installed on a vehicle:
             556          (i) sold or leased to or used by an authorized carrier; and
             557          (ii) before the vehicle is placed in service for the first time;
             558          (34) (a) 45% of the sales price of any new manufactured home; and
             559          (b) 100% of the sales price of any used manufactured home;
             560          (35) sales relating to schools and fundraising sales;


             561          (36) sales or rentals of durable medical equipment if:
             562          (a) a person presents a prescription for the durable medical equipment; and
             563          (b) the durable medical equipment is used for home use only;
             564          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             565      Section 72-11-102 ; and
             566          (b) the commission shall by rule determine the method for calculating sales exempt
             567      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             568          (38) sales to a ski resort of:
             569          (a) snowmaking equipment;
             570          (b) ski slope grooming equipment;
             571          (c) passenger ropeways as defined in Section 72-11-102 ; or
             572          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             573      described in Subsections (38)(a) through (c);
             574          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             575          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             576      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             577      59-12-102 ;
             578          (b) if a seller that sells or rents at the same business location the right to use or operate
             579      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             580      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             581      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             582      amusement, entertainment, or recreation for the assisted amusement devices; and
             583          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
             584      Utah Administrative Rulemaking Act, the commission may make rules:
             585          (i) governing the circumstances under which sales are at the same business location;
             586      and
             587          (ii) establishing the procedures and requirements for a seller to separately account for
             588      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for


             589      assisted amusement devices;
             590          (41) (a) sales of photocopies by:
             591          (i) a governmental entity; or
             592          (ii) an entity within the state system of public education, including:
             593          (A) a school; or
             594          (B) the State Board of Education; or
             595          (b) sales of publications by a governmental entity;
             596          (42) amounts paid for admission to an athletic event at an institution of higher
             597      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             598      20 U.S.C. Sec. 1681 et seq.;
             599          (43) (a) sales made to or by:
             600          (i) an area agency on aging; or
             601          (ii) a senior citizen center owned by a county, city, or town; or
             602          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             603          (44) sales or leases of semiconductor fabricating, processing, research, or development
             604      materials regardless of whether the semiconductor fabricating, processing, research, or
             605      development materials:
             606          (a) actually come into contact with a semiconductor; or
             607          (b) ultimately become incorporated into real property;
             608          (45) an amount paid by or charged to a purchaser for accommodations and services
             609      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             610      59-12-104.2 ;
             611          (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             612      sports event registration certificate in accordance with Section 41-3-306 for the event period
             613      specified on the temporary sports event registration certificate;
             614          (47) sales or uses of electricity, if the sales or uses are:
             615          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             616      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy


             617      source, as designated in the tariff by the Public Service Commission of Utah; and
             618          (b) for an amount of electricity that is:
             619          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             620      under the tariff described in Subsection (47)(a); and
             621          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             622      Subsection (47)(a) that may be purchased under the tariff described in Subsection (47)(a);
             623          (48) sales or rentals of mobility enhancing equipment if a person presents a
             624      prescription for the mobility enhancing equipment;
             625          (49) sales of water in a:
             626          (a) pipe;
             627          (b) conduit;
             628          (c) ditch; or
             629          (d) reservoir;
             630          (50) sales of currency or [coinage] coins that constitute legal tender of a state, the
             631      United States, or [of] a foreign nation;
             632          (51) (a) sales of an item described in Subsection (51)(b) if the item:
             633          (i) does not constitute legal tender of [any nation] a state, the United States, or a
             634      foreign nation; and
             635          (ii) has a gold, silver, or platinum content of [80%] 50% or more; and
             636          (b) Subsection (51)(a) applies to a gold, silver, or platinum:
             637          (i) ingot;
             638          (ii) bar;
             639          (iii) medallion; or
             640          (iv) decorative coin;
             641          (52) amounts paid on a sale-leaseback transaction;
             642          (53) sales of a prosthetic device:
             643          (a) for use on or in a human; and
             644          (b) (i) for which a prescription is required; or


             645          (ii) if the prosthetic device is purchased by a hospital or other medical facility;
             646          (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
             647      machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
             648      or equipment is primarily used in the production or postproduction of the following media for
             649      commercial distribution:
             650          (i) a motion picture;
             651          (ii) a television program;
             652          (iii) a movie made for television;
             653          (iv) a music video;
             654          (v) a commercial;
             655          (vi) a documentary; or
             656          (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
             657      commission by administrative rule made in accordance with Subsection (54)(d); or
             658          (b) notwithstanding Subsection (54)(a), purchases, leases, or rentals of machinery or
             659      equipment by an establishment described in Subsection (54)(c) that is used for the production
             660      or postproduction of the following are subject to the taxes imposed by this chapter:
             661          (i) a live musical performance;
             662          (ii) a live news program; or
             663          (iii) a live sporting event;
             664          (c) the following establishments listed in the 1997 North American Industry
             665      Classification System of the federal Executive Office of the President, Office of Management
             666      and Budget, apply to Subsections (54)(a) and (b):
             667          (i) NAICS Code 512110; or
             668          (ii) NAICS Code 51219; and
             669          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             670      commission may by rule:
             671          (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
             672      or


             673          (ii) define:
             674          (A) "commercial distribution";
             675          (B) "live musical performance";
             676          (C) "live news program"; or
             677          (D) "live sporting event";
             678          (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             679      on or before June 30, 2019, of machinery or equipment that:
             680          (i) is leased or purchased for or by a facility that:
             681          (A) is a renewable energy production facility;
             682          (B) is located in the state; and
             683          (C) (I) becomes operational on or after July 1, 2004; or
             684          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             685      2004, as a result of the use of the machinery or equipment;
             686          (ii) has an economic life of five or more years; and
             687          (iii) is used to make the facility or the increase in capacity of the facility described in
             688      Subsection (55)(a)(i) operational up to the point of interconnection with an existing
             689      transmission grid including:
             690          (A) a wind turbine;
             691          (B) generating equipment;
             692          (C) a control and monitoring system;
             693          (D) a power line;
             694          (E) substation equipment;
             695          (F) lighting;
             696          (G) fencing;
             697          (H) pipes; or
             698          (I) other equipment used for locating a power line or pole; and
             699          (b) this Subsection (55) does not apply to:
             700          (i) machinery or equipment used in construction of:


             701          (A) a new renewable energy production facility; or
             702          (B) the increase in the capacity of a renewable energy production facility;
             703          (ii) contracted services required for construction and routine maintenance activities;
             704      and
             705          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             706      of the facility described in Subsection (55)(a)(i)(C)(II), machinery or equipment used or
             707      acquired after:
             708          (A) the renewable energy production facility described in Subsection (55)(a)(i) is
             709      operational as described in Subsection (55)(a)(iii); or
             710          (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
             711      in Subsection (55)(a)(iii);
             712          (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             713      on or before June 30, 2019, of machinery or equipment that:
             714          (i) is leased or purchased for or by a facility that:
             715          (A) is a waste energy production facility;
             716          (B) is located in the state; and
             717          (C) (I) becomes operational on or after July 1, 2004; or
             718          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             719      2004, as a result of the use of the machinery or equipment;
             720          (ii) has an economic life of five or more years; and
             721          (iii) is used to make the facility or the increase in capacity of the facility described in
             722      Subsection (56)(a)(i) operational up to the point of interconnection with an existing
             723      transmission grid including:
             724          (A) generating equipment;
             725          (B) a control and monitoring system;
             726          (C) a power line;
             727          (D) substation equipment;
             728          (E) lighting;


             729          (F) fencing;
             730          (G) pipes; or
             731          (H) other equipment used for locating a power line or pole; and
             732          (b) this Subsection (56) does not apply to:
             733          (i) machinery or equipment used in construction of:
             734          (A) a new waste energy facility; or
             735          (B) the increase in the capacity of a waste energy facility;
             736          (ii) contracted services required for construction and routine maintenance activities;
             737      and
             738          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             739      described in Subsection (56)(a)(i)(C)(II), machinery or equipment used or acquired after:
             740          (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
             741      described in Subsection (56)(a)(iii); or
             742          (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
             743      in Subsection (56)(a)(iii);
             744          (57) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             745      or before June 30, 2019, of machinery or equipment that:
             746          (i) is leased or purchased for or by a facility that:
             747          (A) is located in the state;
             748          (B) produces fuel from biomass energy including:
             749          (I) methanol; or
             750          (II) ethanol; and
             751          (C) (I) becomes operational on or after July 1, 2004; or
             752          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
             753      a result of the installation of the machinery or equipment;
             754          (ii) has an economic life of five or more years; and
             755          (iii) is installed on the facility described in Subsection (57)(a)(i);
             756          (b) this Subsection (57) does not apply to:


             757          (i) machinery or equipment used in construction of:
             758          (A) a new facility described in Subsection (57)(a)(i); or
             759          (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
             760          (ii) contracted services required for construction and routine maintenance activities;
             761      and
             762          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             763      described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or acquired after:
             764          (A) the facility described in Subsection (57)(a)(i) is operational; or
             765          (B) the increased capacity described in Subsection (57)(a)(i) is operational;
             766          (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
             767      product transferred electronically to a person within this state if that tangible personal property
             768      or product transferred electronically is subsequently shipped outside the state and incorporated
             769      pursuant to contract into and becomes a part of real property located outside of this state;
             770          (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
             771      state or political entity to which the tangible personal property is shipped imposes a sales, use,
             772      gross receipts, or other similar transaction excise tax on the transaction against which the other
             773      state or political entity allows a credit for sales and use taxes imposed by this chapter; and
             774          (c) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             775      a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
             776      refund:
             777          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
             778          (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
             779      which the sale is made;
             780          (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
             781      sale prior to filing for the refund;
             782          (iv) for sales and use taxes paid under this chapter on the sale;
             783          (v) in accordance with Section 59-1-1410 ; and
             784          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if


             785      the person files for the refund on or before June 30, 2011;
             786          (59) purchases:
             787          (a) of one or more of the following items in printed or electronic format:
             788          (i) a list containing information that includes one or more:
             789          (A) names; or
             790          (B) addresses; or
             791          (ii) a database containing information that includes one or more:
             792          (A) names; or
             793          (B) addresses; and
             794          (b) used to send direct mail;
             795          (60) redemptions or repurchases of a product by a person if that product was:
             796          (a) delivered to a pawnbroker as part of a pawn transaction; and
             797          (b) redeemed or repurchased within the time period established in a written agreement
             798      between the person and the pawnbroker for redeeming or repurchasing the product;
             799          (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
             800          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
             801      and
             802          (ii) has a useful economic life of one or more years; and
             803          (b) the following apply to Subsection (61)(a):
             804          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             805          (ii) telecommunications equipment, machinery, or software required for 911 service;
             806          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             807          (iv) telecommunications switching or routing equipment, machinery, or software; or
             808          (v) telecommunications transmission equipment, machinery, or software;
             809          (62) (a) beginning on July 1, 2006, and ending on June 30, 2016, purchases of tangible
             810      personal property or a product transferred electronically that are used in the research and
             811      development of coal-to-liquids, oil shale, or tar sands technology; and
             812          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the


             813      commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
             814      purchases of tangible personal property or a product transferred electronically that are used in
             815      the research and development of coal-to-liquids, oil shale, and tar sands technology;
             816          (63) (a) purchases of tangible personal property or a product transferred electronically
             817      if:
             818          (i) the tangible personal property or product transferred electronically is:
             819          (A) purchased outside of this state;
             820          (B) brought into this state at any time after the purchase described in Subsection
             821      (63)(a)(i)(A); and
             822          (C) used in conducting business in this state; and
             823          (ii) for:
             824          (A) tangible personal property or a product transferred electronically other than the
             825      tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
             826      for a purpose for which the property is designed occurs outside of this state; or
             827          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             828      outside of this state;
             829          (b) the exemption provided for in Subsection (63)(a) does not apply to:
             830          (i) a lease or rental of tangible personal property or a product transferred electronically;
             831      or
             832          (ii) a sale of a vehicle exempt under Subsection (33); and
             833          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             834      purposes of Subsection (63)(a), the commission may by rule define what constitutes the
             835      following:
             836          (i) conducting business in this state if that phrase has the same meaning in this
             837      Subsection (63) as in Subsection (24);
             838          (ii) the first use of tangible personal property or a product transferred electronically if
             839      that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
             840          (iii) a purpose for which tangible personal property or a product transferred


             841      electronically is designed if that phrase has the same meaning in this Subsection (63) as in
             842      Subsection (24);
             843          (64) sales of disposable home medical equipment or supplies if:
             844          (a) a person presents a prescription for the disposable home medical equipment or
             845      supplies;
             846          (b) the disposable home medical equipment or supplies are used exclusively by the
             847      person to whom the prescription described in Subsection (64)(a) is issued; and
             848          (c) the disposable home medical equipment and supplies are listed as eligible for
             849      payment under:
             850          (i) Title XVIII, federal Social Security Act; or
             851          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             852          (65) sales:
             853          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
             854      District Act; or
             855          (b) of tangible personal property to a subcontractor of a public transit district, if the
             856      tangible personal property is:
             857          (i) clearly identified; and
             858          (ii) installed or converted to real property owned by the public transit district;
             859          (66) sales of construction materials:
             860          (a) purchased on or after July 1, 2010;
             861          (b) purchased by, on behalf of, or for the benefit of an international airport:
             862          (i) located within a county of the first class; and
             863          (ii) that has a United States customs office on its premises; and
             864          (c) if the construction materials are:
             865          (i) clearly identified;
             866          (ii) segregated; and
             867          (iii) installed or converted to real property:
             868          (A) owned or operated by the international airport described in Subsection (66)(b); and


             869          (B) located at the international airport described in Subsection (66)(b);
             870          (67) sales of construction materials:
             871          (a) purchased on or after July 1, 2008;
             872          (b) purchased by, on behalf of, or for the benefit of a new airport:
             873          (i) located within a county of the second class; and
             874          (ii) that is owned or operated by a city in which an airline as defined in Section
             875      59-2-102 is headquartered; and
             876          (c) if the construction materials are:
             877          (i) clearly identified;
             878          (ii) segregated; and
             879          (iii) installed or converted to real property:
             880          (A) owned or operated by the new airport described in Subsection (67)(b);
             881          (B) located at the new airport described in Subsection (67)(b); and
             882          (C) as part of the construction of the new airport described in Subsection (67)(b);
             883          (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
             884          (69) purchases and sales described in Section 63H-4-111 ;
             885          (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
             886      overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
             887      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             888      lists a state or country other than this state as the location of registry of the fixed wing turbine
             889      powered aircraft; or
             890          (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
             891      provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
             892      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             893      lists a state or country other than this state as the location of registry of the fixed wing turbine
             894      powered aircraft;
             895          (71) subject to Section 59-12-104.4 , sales of a textbook for a higher education course:
             896          (a) to a person admitted to an institution of higher education; and


             897          (b) by a seller, other than a bookstore owned by an institution of higher education, if
             898      51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
             899      textbook for a higher education course; and
             900          (72) a license fee or tax a municipality imposes in accordance with Subsection
             901      10-1-203 (5) on a purchaser from a business for which the municipality provides an enhanced
             902      level of municipal services.
             903          Section 10. Section 59-12-107 is amended to read:
             904           59-12-107. Collection, remittance, and payment of tax by sellers or other persons
             905      -- Returns -- Reports -- Direct payment by purchaser of vehicle -- Other liability for
             906      collection -- Rulemaking authority -- Credits -- Treatment of bad debt -- Penalties.
             907          (1) (a) Except as provided in Subsection (1)(d) or Section 59-12-107.1 or 59-12-123
             908      and subject to Subsection (1)(e), each seller shall pay or collect and remit the sales and use
             909      taxes imposed by this chapter if within this state the seller:
             910          (i) has or utilizes:
             911          (A) an office;
             912          (B) a distribution house;
             913          (C) a sales house;
             914          (D) a warehouse;
             915          (E) a service enterprise; or
             916          (F) a place of business similar to Subsections (1)(a)(i)(A) through (E);
             917          (ii) maintains a stock of goods;
             918          (iii) regularly solicits orders, regardless of whether or not the orders are accepted in the
             919      state, unless the seller's only activity in the state is:
             920          (A) advertising; or
             921          (B) solicitation by:
             922          (I) direct mail;
             923          (II) electronic mail;
             924          (III) the Internet;


             925          (IV) telecommunications service; or
             926          (V) a means similar to Subsection (1)(a)(iii)(A) or (B);
             927          (iv) regularly engages in the delivery of property in the state other than by:
             928          (A) common carrier; or
             929          (B) United States mail; or
             930          (v) regularly engages in an activity directly related to the leasing or servicing of
             931      property located within the state.
             932          (b) A seller that does not meet one or more of the criteria provided for in Subsection
             933      (1)(a):
             934          (i) except as provided in Subsection (1)(b)(ii), may voluntarily:
             935          (A) collect a tax on a transaction described in Subsection 59-12-103 (1); and
             936          (B) remit the tax to the commission as provided in this part; or
             937          (ii) notwithstanding Subsection (1)(b)(i), shall collect a tax on a transaction described
             938      in Subsection 59-12-103 (1) if Section 59-12-103.1 requires the seller to collect the tax.
             939          (c) The collection and remittance of a tax under this chapter by a seller that is
             940      registered under the agreement may not be used as a factor in determining whether that seller is
             941      required by Subsection (1)(a) to:
             942          (i) pay a tax, fee, or charge under:
             943          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             944          (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
             945          (C) Section 19-6-714 ;
             946          (D) Section 19-6-805 ;
             947          (E) Section 69-2-5 ;
             948          (F) Section 69-2-5.5 ;
             949          (G) Section 69-2-5.6 ; or
             950          (H) this title; or
             951          (ii) collect and remit a tax, fee, or charge under:
             952          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;


             953          (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
             954          (C) Section 19-6-714 ;
             955          (D) Section 19-6-805 ;
             956          (E) Section 69-2-5 ;
             957          (F) Section 69-2-5.5 ;
             958          (G) Section 69-2-5.6 ; or
             959          (H) this title.
             960          (d) A person shall pay a use tax imposed by this chapter on a transaction described in
             961      Subsection 59-12-103 (1) if:
             962          (i) the seller did not collect a tax imposed by this chapter on the transaction; and
             963          (ii) the person:
             964          (A) stores the tangible personal property or product transferred electronically in the
             965      state;
             966          (B) uses the tangible personal property or product transferred electronically in the state;
             967      or
             968          (C) consumes the tangible personal property or product transferred electronically in the
             969      state.
             970          (e) The ownership of property that is located at the premises of a printer's facility with
             971      which the retailer has contracted for printing and that consists of the final printed product,
             972      property that becomes a part of the final printed product, or copy from which the printed
             973      product is produced, shall not result in the retailer being considered to have or maintain an
             974      office, distribution house, sales house, warehouse, service enterprise, or other place of
             975      business, or to maintain a stock of goods, within this state.
             976          (f) (i) As used in this Subsection (1)(f):
             977          (A) "Affiliated group" is as defined in Section 59-7-101 , except that "affiliated group"
             978      includes a corporation that is qualified to do business but is not otherwise doing business in
             979      this state.
             980          (B) "Common ownership" is as defined in Section 59-7-101 .


             981          (C) "Related seller" means a seller that:
             982          (I) is not required to pay or collect and remit sales and use taxes under Subsection
             983      (1)(a) or Section 59-12-103.1 ;
             984          (II) is:
             985          (Aa) related to a seller that is required to pay or collect and remit sales and use taxes
             986      under Subsection (1)(a) as part of an affiliated group or because of common ownership; or
             987          (Bb) a limited liability company owned by the parent corporation of an affiliated group
             988      if that parent corporation of the affiliated group is required to pay or collect and remit sales and
             989      use taxes under Subsection (1)(a); and
             990          (III) does not voluntarily collect and remit a tax under Subsection (1)(b)(i).
             991          (ii) A seller is not required to pay or collect and remit sales and use taxes under
             992      Subsection (1)(a):
             993          (A) if the seller is a related seller;
             994          (B) if the seller to which the related seller is related does not engage in any of the
             995      following activities on behalf of the related seller:
             996          (I) advertising;
             997          (II) marketing;
             998          (III) sales; or
             999          (IV) other services; and
             1000          (C) if the seller to which the related seller is related accepts the return of an item sold
             1001      by the related seller, the seller to which the related seller is related accepts the return of that
             1002      item:
             1003          (I) sold by a seller that is not a related seller; and
             1004          (II) on the same terms as the return of an item sold by that seller to which the related
             1005      seller is related.
             1006          (2) (a) Except as provided in Section 59-12-107.1 , a tax under this chapter shall be
             1007      collected from a purchaser.
             1008          (b) A seller may not collect as tax an amount, without regard to fractional parts of one


             1009      cent, in excess of the tax computed at the rates prescribed by this chapter.
             1010          (c) (i) Each seller shall:
             1011          (A) give the purchaser a receipt for the tax collected; or
             1012          (B) bill the tax as a separate item and declare the name of this state and the seller's
             1013      sales and use tax license number on the invoice for the sale.
             1014          (ii) The receipt or invoice is prima facie evidence that the seller has collected the tax
             1015      and relieves the purchaser of the liability for reporting the tax to the commission as a
             1016      consumer.
             1017          (d) A seller is not required to maintain a separate account for the tax collected, but is
             1018      considered to be a person charged with receipt, safekeeping, and transfer of public money.
             1019          (e) Taxes collected by a seller pursuant to this chapter shall be held in trust for the
             1020      benefit of the state and for payment to the commission in the manner and at the time provided
             1021      for in this chapter.
             1022          (f) If any seller, during any reporting period, collects as a tax an amount in excess of
             1023      the lawful state and local percentage of total taxable sales allowed under this chapter, the seller
             1024      shall remit to the commission the full amount of the tax imposed under this chapter, plus any
             1025      excess.
             1026          (g) If the accounting methods regularly employed by the seller in the transaction of the
             1027      seller's business are such that reports of sales made during a calendar month or quarterly period
             1028      will impose unnecessary hardships, the commission may accept reports at intervals that will, in
             1029      the commission's opinion, better suit the convenience of the taxpayer or seller and will not
             1030      jeopardize collection of the tax.
             1031          (h) (i) For a purchase paid with specie legal tender as defined in Section 59-1-1501.1 ,
             1032      and until such time as the commission accepts specie legal tender for the payment of a tax
             1033      under this chapter, if the commission requires a seller to remit a tax under this chapter in legal
             1034      tender other than specie legal tender, the seller shall state on the seller's books and records and
             1035      on an invoice, bill of sale, or similar document provided to the purchaser:
             1036          (A) the purchase price in specie legal tender and in the legal tender the seller is


             1037      required to remit to the commission;
             1038          (B) subject to Subsection (2)(h)(ii), the amount of tax due under this chapter in specie
             1039      legal tender and in the legal tender the seller is required to remit to the commission;
             1040          (C) the tax rate under this chapter applicable to the purchase; and
             1041          (D) the date of the purchase.
             1042          (ii) (A) Subject to Subsection (2)(h)(ii)(B), for purposes of determining the amount of
             1043      tax due under Subsection (2)(h)(i), a seller shall use the most recent London fixing price for the
             1044      specie legal tender the purchaser paid.
             1045          (B) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1046      commission may make rules for determining the amount of tax due under Subsection (2)(h)(i)
             1047      if the London fixing price is not available for a particular day.
             1048          (3) (a) Except as provided in Subsections (4) through (6) and Section 59-12-108 , the
             1049      sales or use tax imposed by this chapter is due and payable to the commission quarterly on or
             1050      before the last day of the month next succeeding each calendar quarterly period.
             1051          (b) (i) Each seller shall, on or before the last day of the month next succeeding each
             1052      calendar quarterly period, file with the commission a return for the preceding quarterly period.
             1053          (ii) The seller shall remit with the return under Subsection (3)(b)(i) the amount of the
             1054      tax required under this chapter to be collected or paid for the period covered by the return.
             1055          (c) Except as provided in Subsection (4)(c), a return shall contain information and be in
             1056      a form the commission prescribes by rule.
             1057          (d) The sales tax as computed in the return shall be based upon the total nonexempt
             1058      sales made during the period, including both cash and charge sales.
             1059          (e) The use tax as computed in the return shall be based upon the total amount of
             1060      purchases for storage, use, or other consumption in this state made during the period, including
             1061      both by cash and by charge.
             1062          (f) (i) Subject to Subsection (3)(f)(ii) and in accordance with Title 63G, Chapter 3,
             1063      Utah Administrative Rulemaking Act, the commission may by rule extend the time for making
             1064      returns and paying the taxes.


             1065          (ii) An extension under Subsection (3)(f)(i) may not be for more than 90 days.
             1066          (g) The commission may require returns and payment of the tax to be made for other
             1067      than quarterly periods if the commission considers it necessary in order to ensure the payment
             1068      of the tax imposed by this chapter.
             1069          (h) (i) The commission may require a seller that files a simplified electronic return with
             1070      the commission to file an additional electronic report with the commission.
             1071          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1072      commission may make rules providing:
             1073          (A) the information required to be included in the additional electronic report described
             1074      in Subsection (3)(h)(i); and
             1075          (B) one or more due dates for filing the additional electronic report described in
             1076      Subsection (3)(h)(i).
             1077          (4) (a) As used in this Subsection (4) and Subsection (5)(b), "remote seller" means a
             1078      seller that is:
             1079          (i) registered under the agreement;
             1080          (ii) described in Subsection (1)(b); and
             1081          (iii) not a:
             1082          (A) model 1 seller;
             1083          (B) model 2 seller; or
             1084          (C) model 3 seller.
             1085          (b) (i) Except as provided in Subsection (4)(b)(ii), a tax a remote seller collects in
             1086      accordance with Subsection (1)(b) is due and payable:
             1087          (A) to the commission;
             1088          (B) annually; and
             1089          (C) on or before the last day of the month immediately following the last day of each
             1090      calendar year.
             1091          (ii) The commission may require that a tax a remote seller collects in accordance with
             1092      Subsection (1)(b) be due and payable:


             1093          (A) to the commission; and
             1094          (B) on the last day of the month immediately following any month in which the seller
             1095      accumulates a total of at least $1,000 in agreement sales and use tax.
             1096          (c) (i) If a remote seller remits a tax to the commission in accordance with Subsection
             1097      (4)(b), the remote seller shall file a return:
             1098          (A) with the commission;
             1099          (B) with respect to the tax;
             1100          (C) containing information prescribed by the commission; and
             1101          (D) on a form prescribed by the commission.
             1102          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1103      commission shall make rules prescribing:
             1104          (A) the information required to be contained in a return described in Subsection
             1105      (4)(a)(i); and
             1106          (B) the form described in Subsection (4)(c)(i)(D).
             1107          (d) A tax a remote seller collects in accordance with this Subsection (4) shall be
             1108      calculated on the basis of the total amount of taxable transactions under Subsection
             1109      59-12-103 (1) the remote seller completes, including:
             1110          (i) a cash transaction; and
             1111          (ii) a charge transaction.
             1112          (5) (a) Except as provided in Subsection (5)(b), a tax a seller that files a simplified
             1113      electronic return collects in accordance with this chapter is due and payable:
             1114          (i) monthly on or before the last day of the month immediately following the month for
             1115      which the seller collects a tax under this chapter; and
             1116          (ii) for the month for which the seller collects a tax under this chapter.
             1117          (b) A tax a remote seller that files a simplified electronic return collects in accordance
             1118      with this chapter is due and payable as provided in Subsection (4).
             1119          (6) (a) On each vehicle sale made by other than a regular licensed vehicle dealer, the
             1120      purchaser shall pay the sales or use tax directly to the commission if the vehicle is subject to


             1121      titling or registration under the laws of this state.
             1122          (b) The commission shall collect the tax described in Subsection (6)(a) when the
             1123      vehicle is titled or registered.
             1124          (7) If any sale of tangible personal property or any other taxable transaction under
             1125      Subsection 59-12-103 (1), is made by a wholesaler to a retailer, the wholesaler is not
             1126      responsible for the collection or payment of the tax imposed on the sale and the retailer is
             1127      responsible for the collection or payment of the tax imposed on the sale if:
             1128          (a) the retailer represents that the personal property is purchased by the retailer for
             1129      resale; and
             1130          (b) the personal property is not subsequently resold.
             1131          (8) If any sale of property or service subject to the tax is made to a person prepaying
             1132      sales or use tax in accordance with Title 63M, Chapter 5, Resource Development Act, or to a
             1133      contractor or subcontractor of that person, the person to whom such payment or consideration
             1134      is payable is not responsible for the collection or payment of the sales or use tax and the person
             1135      prepaying the sales or use tax is responsible for the collection or payment of the sales or use tax
             1136      if the person prepaying the sales or use tax represents that the amount prepaid as sales or use
             1137      tax has not been fully credited against sales or use tax due and payable under the rules
             1138      promulgated by the commission.
             1139          (9) (a) For purposes of this Subsection (9):
             1140          (i) Except as provided in Subsection (9)(a)(ii), "bad debt" is as defined in Section 166,
             1141      Internal Revenue Code.
             1142          (ii) Notwithstanding Subsection (9)(a)(i), "bad debt" does not include:
             1143          (A) an amount included in the purchase price of tangible personal property, a product
             1144      transferred electronically, or a service that is:
             1145          (I) not a transaction described in Subsection 59-12-103 (1); or
             1146          (II) exempt under Section 59-12-104 ;
             1147          (B) a financing charge;
             1148          (C) interest;


             1149          (D) a tax imposed under this chapter on the purchase price of tangible personal
             1150      property, a product transferred electronically, or a service;
             1151          (E) an uncollectible amount on tangible personal property or a product transferred
             1152      electronically that:
             1153          (I) is subject to a tax under this chapter; and
             1154          (II) remains in the possession of a seller until the full purchase price is paid;
             1155          (F) an expense incurred in attempting to collect any debt; or
             1156          (G) an amount that a seller does not collect on repossessed property.
             1157          (b) A seller may deduct bad debt from the total amount from which a tax under this
             1158      chapter is calculated on a return.
             1159          (c) A seller may file a refund claim with the commission if:
             1160          (i) the amount of bad debt for the time period described in Subsection (9)(e) exceeds
             1161      the amount of the seller's sales that are subject to a tax under this chapter for that same time
             1162      period; and
             1163          (ii) as provided in Section 59-1-1410 .
             1164          (d) A bad debt deduction under this section may not include interest.
             1165          (e) A bad debt may be deducted under this Subsection (9) on a return for the time
             1166      period during which the bad debt:
             1167          (i) is written off as uncollectible in the seller's books and records; and
             1168          (ii) would be eligible for a bad debt deduction:
             1169          (A) for federal income tax purposes; and
             1170          (B) if the seller were required to file a federal income tax return.
             1171          (f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
             1172      claims a refund under this Subsection (9), the seller shall report and remit a tax under this
             1173      chapter:
             1174          (i) on the portion of the bad debt the seller recovers; and
             1175          (ii) on a return filed for the time period for which the portion of the bad debt is
             1176      recovered.


             1177          (g) For purposes of reporting a recovery of a portion of bad debt under Subsection
             1178      (9)(f), a seller shall apply amounts received on the bad debt in the following order:
             1179          (i) in a proportional amount:
             1180          (A) to the purchase price of the tangible personal property, product transferred
             1181      electronically, or service; and
             1182          (B) to the tax due under this chapter on the tangible personal property, product
             1183      transferred electronically, or service; and
             1184          (ii) to:
             1185          (A) interest charges;
             1186          (B) service charges; and
             1187          (C) other charges.
             1188          (h) A seller's certified service provider may make a deduction or claim a refund for bad
             1189      debt on behalf of the seller:
             1190          (i) in accordance with this Subsection (9); and
             1191          (ii) if the certified service provider credits or refunds the entire amount of the bad debt
             1192      deduction or refund to the seller.
             1193          (i) A seller may allocate bad debt among the states that are members of the agreement
             1194      if the seller's books and records support that allocation.
             1195          (10) (a) A seller may not, with intent to evade any tax, fail to timely remit the full
             1196      amount of tax required by this chapter.
             1197          (b) A violation of this section is punishable as provided in Section 59-1-401 .
             1198          (c) Each person who fails to pay any tax to the state or any amount of tax required to be
             1199      paid to the state, except amounts determined to be due by the commission under Chapter 1,
             1200      Part 14, Assessment, Collections, and Refunds Act, or Section 59-12-111 , within the time
             1201      required by this chapter, or who fails to file any return as required by this chapter, shall pay, in
             1202      addition to the tax, penalties and interest as provided in Section 59-1-401 .
             1203          (d) For purposes of prosecution under this section, each quarterly tax period in which a
             1204      seller, with intent to evade any tax, collects a tax and fails to timely remit the full amount of the


             1205      tax required to be remitted, constitutes a separate offense.
             1206          Section 11. Repealer.
             1207          This bill repeals:
             1208          Section 59-1-1504, Revenue and Taxation Interim Committee study.
             1209          Section 12. Effective date -- Retrospective operation.
             1210          (1) Except as provided in Subsections (2) and (3), this bill takes effect on May 8, 2012.
             1211          (2) The amendments to Sections 59-12-104 and 59-12-107 take effect on July 1, 2012.
             1212          (3) The amendments to Section 59-10-1028 have retrospective operation for a taxable
             1213      year beginning on or after January 1, 2012.


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