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Third Substitute S.B. 65

This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Wed, Feb 29, 2012 at 11:08 AM by cmillar. --> This document includes House Floor Amendments incorporated into the bill on Thu, Mar 8, 2012 at 6:26 PM by lerror. -->

Senator J. Stuart Adams proposes the following substitute bill:


             1     
ALTERNATIVE ENERGY DEVELOPMENT TAX INCENTIVES

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: J. Stuart Adams

             5     
House Sponsor: Michael E. Noel

             6     

             7      LONG TITLE
             8      General Description:
             9          This bill addresses provisions related to alternative energy development tax incentives.
             10      Highlighted Provisions:
             11          This bill:
             12          .    repeals the Alternative Energy Development Act;
             13          .    enacts the Alternative Energy Development Tax Credit Act related to alternative
             14      energy development tax credits;
             15          .    enacts the Alternative Energy Manufacturing Tax Credit Act related to alternative
             16      energy manufacturing tax credits;
             17          .    repeals provisions related to alternative energy development tax credits in economic
             18      development tax credit provisions;
             19          .    defines terms;
             20          .    modifies and expands alternative energy sales and use tax exemptions;
             21          .    extends the time period for claiming certain sales and use tax exemptions related to
             22      alternative energy;    
             23          .    requires the Office of Energy Development to administer the alternative energy
             24      development tax credits;
             25          .    requires the Governor's Office of Economic Development to administer the



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             26
     alternative energy manufacturing tax credits; and
             27          .    makes technical and conforming changes.
             28      Money Appropriated in this Bill:
             29          None
             30      Other Special Clauses:
             31          This bill provides effective dates.
             32          This bill provides for retrospective operation.
             33      Utah Code Sections Affected:
             34      AMENDS:
             35          10-1-304, as last amended by Laws of Utah 2009, Chapter 92
             36          59-7-614.2, as last amended by Laws of Utah 2011, Chapter 384
             37          59-10-1107, as last amended by Laws of Utah 2011, Chapter 384
             38          59-12-102, as last amended by Laws of Utah 2011, Chapters 14, 285, and 314
             39          59-12-104, as last amended by Laws of Utah 2011, Chapters 288, 314, 370, and 391
             40          63M-4-401, as enacted by Laws of Utah 2011, Chapter 375
             41      ENACTS:
             42          59-7-614.7, Utah Code Annotated 1953
             43          59-7-614.8, Utah Code Annotated 1953
             44          59-10-1029, Utah Code Annotated 1953
             45          59-10-1030, Utah Code Annotated 1953
             46          63M-1-3101, Utah Code Annotated 1953
             47          63M-1-3102, Utah Code Annotated 1953
             48          63M-1-3103, Utah Code Annotated 1953
             49          63M-1-3104, Utah Code Annotated 1953
             50          63M-1-3105, Utah Code Annotated 1953
             51          63M-4-501, Utah Code Annotated 1953
             52          63M-4-502, Utah Code Annotated 1953
             53          63M-4-503, Utah Code Annotated 1953
             54          63M-4-504, Utah Code Annotated 1953
             55          63M-4-505, Utah Code Annotated 1953
             56      REPEALS:



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             57
         63M-1-2801, as last amended by Laws of Utah 2010, Chapter 45
             58          63M-1-2802, as last amended by Laws of Utah 2010, Chapter 45
             59          63M-1-2803, as last amended by Laws of Utah 2010, Chapter 45
             60          63M-1-2804, as last amended by Laws of Utah 2010, Chapter 45
             61          63M-1-2805, as last amended by Laws of Utah 2010, Chapter 45
             62          63M-1-2806, as last amended by Laws of Utah 2011, Chapter 384
             63     

             64      Be it enacted by the Legislature of the state of Utah:
             65          Section 1. Section 10-1-304 is amended to read:
             66           10-1-304. Municipality and military installation development authority may levy
             67      tax -- Rate -- Imposition or repeal of tax -- Tax rate change -- Effective date -- Notice
             68      requirements -- Exemptions.
             69          (1) (a) Except as provided in Subsections (4) and (5), a municipality may levy a
             70      municipal energy sales and use tax on the sale or use of taxable energy within the municipality:
             71          (i) by ordinance as provided in Section 10-1-305 ; and
             72          (ii) of up to 6% of the delivered value of the taxable energy.
             73          (b) Subject to Section 63H-1-203 , the military installation development authority
             74      created in Section 63H-1-201 may levy a municipal energy sales and use tax under this part
             75      within a project area described in a project area plan adopted by the authority under Title 63H,
             76      Chapter 1, Military Installation Development Authority Act, as though the authority were a
             77      municipality.
             78          (2) A municipal energy sales and use tax imposed under this part may be in addition to
             79      any sales and use tax imposed by the municipality under Title 59, Chapter 12, Sales and Use
             80      Tax Act.
             81          (3) (a) For purposes of this Subsection (3):
             82          (i) "Annexation" means an annexation to a municipality under [Title 10,] Chapter 2,
             83      Part 4, Annexation.
             84          (ii) "Annexing area" means an area that is annexed into a municipality.
             85          (b) (i) If, on or after May 1, 2000, a city or town enacts or repeals a tax or changes the
             86      rate of a tax under this part, the enactment, repeal, or change shall take effect:
             87          (A) on the first day of a calendar quarter; and



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             88
         (B) after a 90-day period beginning on the date the commission receives notice meeting
             89      the requirements of Subsection (3)(b)(ii) from the municipality.
             90          (ii) The notice described in Subsection (3)(b)(i)(B) shall state:
             91          (A) that the city or town will enact or repeal a tax or change the rate of a tax under this
             92      part;
             93          (B) the statutory authority for the tax described in Subsection (3)(b)(ii)(A);
             94          (C) the effective date of the tax described in Subsection (3)(b)(ii)(A); and
             95          (D) if the city or town enacts the tax or changes the rate of the tax described in
             96      Subsection (3)(b)(ii)(A), the new rate of the tax.
             97          (c) (i) If, for an annexation that occurs on or after May 1, 2000, the annexation will
             98      result in a change in the rate of a tax under this part for an annexing area, the change shall take
             99      effect:
             100          (A) on the first day of a calendar quarter; and
             101          (B) after a 90-day period beginning on the date the commission receives notice meeting
             102      the requirements of Subsection (3)(c)(ii) from the municipality that annexes the annexing area.
             103          (ii) The notice described in Subsection (3)(c)(i)(B) shall state:
             104          (A) that the annexation described in Subsection (3)(c)(i) will result in a change in the
             105      rate of a tax under this part for the annexing area;
             106          (B) the statutory authority for the tax described in Subsection (3)(c)(ii)(A);
             107          (C) the effective date of the tax described in Subsection (3)(c)(ii)(A); and
             108          (D) the new rate of the tax described in Subsection (3)(c)(ii)(A).
             109          (4) (a) [A] Subject to Subsection (4)(b), a sale or use of electricity within a
             110      municipality is exempt from the tax authorized by this section if the sale or use is[: (a)] made
             111      under a tariff adopted by the Public Service Commission of Utah only for purchase of
             112      electricity produced from a new [wind, geothermal, biomass, or solar power energy] source of
             113      alternative energy, as defined in Section 59-12-102 , as designated in the tariff by the Public
             114      Service Commission of Utah[; and].
             115          [(b) for an amount of electricity that is:]
             116          [(i) unrelated to the amount of electricity used by the person purchasing the electricity
             117      under the tariff described in Subsection (4)(a); and]
             118          [(ii) equivalent to the number of kilowatthours specified in the tariff described in



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             119
     Subsection (4)(a) that may be purchased under the tariff described in Subsection (4)(a).]
             120          (b) The exemption under Subsection (4)(a) applies to the portion of the tariff rate a
             121      customer pays under the tariff described in Subsection (4)(a) that exceeds the tariff rate under
             122      the tariff described in Subsection (4)(a) that the customer would have paid absent the tariff.
             123          (5) (a) A municipality may not levy a municipal energy sales and use tax within any
             124      portion of the municipality that is within a project area described in a project area plan adopted
             125      by the military installation development authority under Title 63H, Chapter 1, Military
             126      Installation Development Authority Act.
             127          (b) Subsection (5)(a) does not apply to the military installation development authority's
             128      levy of a municipal energy sales and use tax.
             129          Section 2. Section 59-7-614.2 is amended to read:
             130           59-7-614.2. Refundable economic development tax credit.
             131          (1) As used in this section:
             132          (a) "Business entity" means a taxpayer that meets the definition of "business entity" as
             133      defined in Section 63M-1-2403 [or 63M-1-2803 ].
             134          (b) "Community development and renewal agency" is as defined in Section 17C-1-102 .
             135          (c) "Local government entity" is as defined in Section 63M-1-2403 .
             136          (d) "Office" means the Governor's Office of Economic Development.
             137          (2) Subject to the other provisions of this section, a business entity, local government
             138      entity, or community development and renewal agency may claim a refundable tax credit for
             139      economic development.
             140          (3) The tax credit under this section is the amount listed as the tax credit amount on the
             141      tax credit certificate that the office issues to the business entity, local government entity, or
             142      community development and renewal agency for the taxable year.
             143          (4) A community development and renewal agency may claim a tax credit under this
             144      section only if a local government entity assigns the tax credit to the community development
             145      and renewal agency in accordance with Section 63M-1-2404 .
             146          (5) (a) In accordance with any rules prescribed by the commission under Subsection
             147      (5)(b), the commission shall make a refund to the following that claim a tax credit under this
             148      section:
             149          (i) a local government entity;



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         (ii) a community development and renewal agency; or
             151          (iii) a business entity if the amount of the tax credit exceeds the business entity's tax
             152      liability for a taxable year.
             153          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             154      commission may make rules providing procedures for making a refund to a business entity,
             155      local government entity, or community development and renewal agency as required by
             156      Subsection (5)(a).
             157          (6) (a) On or before October 1, 2013, and every five years after October 1, 2013, the
             158      Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
             159      make recommendations to the Legislative Management Committee and the Workforce Services
             160      and Community and Economic Development Interim Committee concerning whether the tax
             161      credit should be continued, modified, or repealed.
             162          (b) For purposes of the study required by this Subsection (6), the office shall provide
             163      the following information to the Revenue and Taxation Interim Committee:
             164          (i) the amount of tax credit that the office grants to each business entity, local
             165      government entity, or community development and renewal agency for each calendar year;
             166          (ii) the criteria that the office uses in granting a tax credit;
             167          (iii) (A) for a business entity, the new state revenues generated by the business entity
             168      for the calendar year; or
             169          (B) for a local government entity, regardless of whether the local government entity
             170      assigns the tax credit in accordance with Section 63M-1-2404 , the new state revenues
             171      generated as a result of a new commercial project within the local government entity for each
             172      calendar year;
             173          (iv) the information contained in the office's latest report to the Legislature under
             174      Section 63M-1-2406 [or 63M-1-2806 ]; and
             175          (v) any other information that the Revenue and Taxation Interim Committee requests.
             176          (c) The Revenue and Taxation Interim Committee shall ensure that its
             177      recommendations under Subsection (6)(a) include an evaluation of:
             178          (i) the cost of the tax credit to the state;
             179          (ii) the purpose and effectiveness of the tax credit; and
             180          (iii) the extent to which the state benefits from the tax credit.



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             181
         Section 3. Section 59-7-614.7 is enacted to read:
             182          59-7-614.7. Nonrefundable alternative energy development tax credit.
             183          (1) As used in this section:
             184          (a) "Alternative energy entity" is as defined in Section 63M-4-502 .
             185          (b) "Alternative energy project" is as defined in Section 63M-4-502 .
             186          (c) "Office" is as defined in Section 63M-4-401 .
             187          (2) Subject to the other provisions of this section, an alternative energy entity may
             188      claim a nonrefundable tax credit for alternative energy development as provided in this section.
             189          (3) The tax credit under this section is the amount listed as the tax credit amount on a
             190      tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
             191      Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
             192          (4) An alternative energy entity may carry forward a tax credit under this section for a
             193      period that does not exceed the next seven taxable years if:
             194          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
             195      taxable year; and
             196          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
             197      under this chapter for that taxable year.
             198          (5) (a) On or before October 1, 2017, and every five years after October 1, 2017, the
             199      Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
             200      make recommendations to the Legislative Management Committee concerning whether the tax
             201      credit should be continued, modified, or repealed.
             202          (b) For purposes of the study required by this Subsection (5), the office shall provide
             203      the following information to the Revenue and Taxation Interim Committee:
             204          (i) the amount of tax credit that the office grants to each alternative energy entity for
             205      each taxable year;
             206          (ii) the new state revenues generated by each alternative energy project;
             207          (iii) the information contained in the office's latest report to the Legislature under
             208      Section 63M-4-505 ; and
             209          (iv) any other information that the Revenue and Taxation Interim Committee requests.
             210          (c) The Revenue and Taxation Interim Committee shall ensure that its
             211      recommendations under Subsection (5)(a) include an evaluation of:



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         (i) the cost of the tax credit to the state;
             213          (ii) the purpose and effectiveness of the tax credit; and
             214          (iii) the extent to which the state benefits from the tax credit.
             215          Section 4. Section 59-7-614.8 is enacted to read:
             216          59-7-614.8. Nonrefundable alternative energy manufacturing tax credit.
             217          (1) As used in this section:
             218          (a) "Alternative energy entity" is as defined in Section 63M-1-3102 .
             219          (b) "Alternative energy manufacturing project" is as defined in Section 63M-1-3102 .
             220          (c) "Office" means the Governor's Office of Economic Development.
             221          (2) Subject to the other provisions of this section, an alternative energy entity may
             222      claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
             223      section.
             224          (3) The tax credit under this section is the amount listed as the tax credit amount on a
             225      tax credit certificate that the office issues under Title 63M, Chapter 1, Part 31, Alternative
             226      Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
             227          (4) An alternative energy entity may carry forward a tax credit under this section for a
             228      period that does not exceed the next seven taxable years if:
             229          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
             230      taxable year; and
             231          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
             232      under this chapter for that taxable year.
             233          (5) (a) On or before October 1, 2017, and every five years after October 1, 2017, the
             234      Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
             235      make recommendations to the Legislative Management Committee concerning whether the tax
             236      credit should be continued, modified, or repealed.
             237          (b) For purposes of the study required by this Subsection (5), the office shall provide
             238      the following information to the Revenue and Taxation Interim Committee:
             239          (i) the amount of tax credit that the office grants to each alternative energy entity for
             240      each taxable year;
             241          (ii) the new state revenues generated by each alternative energy manufacturing project;
             242          (iii) the information contained in the office's latest report to the Legislature under



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             243
     Section 63M-1-3105 ; and
             244          (iv) any other information that the Revenue and Taxation Interim Committee requests.
             245          (c) The Revenue and Taxation Interim Committee shall ensure that its
             246      recommendations under Subsection (5)(a) include an evaluation of:
             247          (i) the cost of the tax credit to the state;
             248          (ii) the purpose and effectiveness of the tax credit; and
             249          (iii) the extent to which the state benefits from the tax credit.
             250          Section 5. Section 59-10-1029 is enacted to read:
             251          59-10-1029. Nonrefundable alternative energy development tax credit.
             252          (1) As used in this section:
             253          (a) "Alternative energy entity" is as defined in Section 63M-4-502 .
             254          (b) "Alternative energy project" is as defined in Section 63M-4-502 .
             255          (c) "Office" is as defined in Section 63M-4-401 .
             256          (2) Subject to the other provisions of this section, an alternative energy entity may
             257      claim a nonrefundable tax credit for alternative energy development as provided in this section.
             258          (3) The tax credit under this section is the amount listed as the tax credit amount on a
             259      tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
             260      Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
             261          (4) An alternative energy entity may carry forward a tax credit under this section for a
             262      period that does not exceed the next seven taxable years if:
             263          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
             264      taxable year; and
             265          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
             266      under this chapter for that taxable year.
             267          (5) (a) On or before October 1, 2017, and every five years after October 1, 2017, the
             268      Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
             269      make recommendations to the Legislative Management Committee concerning whether the tax
             270      credit should be continued, modified, or repealed.
             271          (b) For purposes of the study required by this Subsection (5), the office shall provide
             272      the following information to the Revenue and Taxation Interim Committee:
             273          (i) the amount of tax credit that the office grants to each alternative energy entity for



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             274
     each taxable year;
             275          (ii) the new state revenues generated by each alternative energy project;
             276          (iii) the information contained in the office's latest report to the Legislature under
             277      Section 63M-4-505 ; and
             278          (iv) any other information that the Revenue and Taxation Interim Committee requests.
             279          (c) The Revenue and Taxation Interim Committee shall ensure that its
             280      recommendations under Subsection (5)(a) include an evaluation of:
             281          (i) the cost of the tax credit to the state;
             282          (ii) the purpose and effectiveness of the tax credit; and
             283          (iii) the extent to which the state benefits from the tax credit.
             284          Section 6. Section 59-10-1030 is enacted to read:
             285          59-10-1030. Nonrefundable alternative energy manufacturing tax credit.
             286          (1) As used in this section:
             287          (a) "Alternative energy entity" is as defined in Section 63M-1-3102 .
             288          (b) "Alternative energy manufacturing project" is as defined in Section 63M-1-3102 .
             289          (c) "Office" means the Governor's Office of Economic Development.
             290          (2) Subject to the other provisions of this section, an alternative energy entity may
             291      claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
             292      section.
             293          (3) The tax credit under this section is the amount listed as the tax credit amount on a
             294      tax credit certificate that the office issues under Title 63M, Chapter 1, Part 31, Alternative
             295      Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
             296          (4) An alternative energy entity may carry forward a tax credit under this section for a
             297      period that does not exceed the next seven taxable years if:
             298          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
             299      taxable year; and
             300          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
             301      under this chapter for that taxable year.
             302          (5) (a) On or before October 1, 2017, and every five years after October 1, 2017, the
             303      Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
             304      make recommendations to the Legislative Management Committee concerning whether the tax



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             305
     credit should be continued, modified, or repealed.
             306          (b) For purposes of the study required by this Subsection (5), the office shall provide
             307      the following information to the Revenue and Taxation Interim Committee:
             308          (i) the amount of tax credit that the office grants to each alternative energy entity for
             309      each taxable year;
             310          (ii) the new state revenues generated by each alternative energy manufacturing project;
             311          (iii) the information contained in the office's latest report to the Legislature under
             312      Section 63M-1-3105 ; and
             313          (iv) any other information that the Revenue and Taxation Interim Committee requests.
             314          (c) The Revenue and Taxation Interim Committee shall ensure that its
             315      recommendations under Subsection (5)(a) include an evaluation of:
             316          (i) the cost of the tax credit to the state;
             317          (ii) the purpose and effectiveness of the tax credit; and
             318          (iii) the extent to which the state benefits from the tax credit.
             319          Section 7. Section 59-10-1107 is amended to read:
             320           59-10-1107. Refundable economic development tax credit.
             321          (1) As used in this section:
             322          (a) "Business entity" means a claimant, estate, or trust that meets the definition of
             323      "business entity" as defined in Section 63M-1-2403 [or 63M-1-2803 ].
             324          (b) "Office" means the Governor's Office of Economic Development.
             325          (2) Subject to the other provisions of this section, a business entity may claim a
             326      refundable tax credit for economic development.
             327          (3) The tax credit under this section is the amount listed as the tax credit amount on the
             328      tax credit certificate that the office issues to the business entity for the taxable year.
             329          (4) (a) In accordance with any rules prescribed by the commission under Subsection
             330      (4)(b), the commission shall make a refund to a business entity that claims a tax credit under
             331      this section if the amount of the tax credit exceeds the business entity's tax liability for a
             332      taxable year.
             333          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             334      commission may make rules providing procedures for making a refund to a business entity as
             335      required by Subsection (4)(a).



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             336
         (5) (a) On or before October 1, 2013, and every five years after October 1, 2013, the
             337      Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
             338      make recommendations to the Legislative Management Committee and the Workforce Services
             339      and Community and Economic Development Interim Committee concerning whether the tax
             340      credit should be continued, modified, or repealed.
             341          (b) For purposes of the study required by this Subsection (5), the office shall provide
             342      the following information to the Revenue and Taxation Interim Committee:
             343          (i) the amount of tax credit the office grants to each taxpayer for each calendar year;
             344          (ii) the criteria the office uses in granting a tax credit;
             345          (iii) the new state revenues generated by each taxpayer for each calendar year;
             346          (iv) the information contained in the office's latest report to the Legislature under
             347      Section 63M-1-2406 [or 63M-1-2806 ]; and
             348          (v) any other information that the Revenue and Taxation Interim Committee requests.
             349          (c) The Revenue and Taxation Interim Committee shall ensure that its
             350      recommendations under Subsection (5)(a) include an evaluation of:
             351          (i) the cost of the tax credit to the state;
             352          (ii) the purpose and effectiveness of the tax credit; and
             353          (iii) the extent to which the state benefits from the tax credit.
             354          Section 8. Section 59-12-102 is amended to read:
             355           59-12-102. Definitions.
             356          As used in this chapter:
             357          (1) "800 service" means a telecommunications service that:
             358          (a) allows a caller to dial a toll-free number without incurring a charge for the call; and
             359          (b) is typically marketed:
             360          (i) under the name 800 toll-free calling;
             361          (ii) under the name 855 toll-free calling;
             362          (iii) under the name 866 toll-free calling;
             363          (iv) under the name 877 toll-free calling;
             364          (v) under the name 888 toll-free calling; or
             365          (vi) under a name similar to Subsections (1)(b)(i) through (v) as designated by the
             366      Federal Communications Commission.



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             367
         (2) (a) "900 service" means an inbound toll telecommunications service that:
             368          (i) a subscriber purchases;
             369          (ii) allows a customer of the subscriber described in Subsection (2)(a)(i) to call in to
             370      the subscriber's:
             371          (A) prerecorded announcement; or
             372          (B) live service; and
             373          (iii) is typically marketed:
             374          (A) under the name 900 service; or
             375          (B) under a name similar to Subsection (2)(a)(iii)(A) as designated by the Federal
             376      Communications Commission.
             377          (b) "900 service" does not include a charge for:
             378          (i) a collection service a seller of a telecommunications service provides to a
             379      subscriber; or
             380          (ii) the following a subscriber sells to the subscriber's customer:
             381          (A) a product; or
             382          (B) a service.
             383          (3) (a) "Admission or user fees" includes season passes.
             384          (b) "Admission or user fees" does not include annual membership dues to private
             385      organizations.
             386          (4) "Agreement" means the Streamlined Sales and Use Tax Agreement adopted on
             387      November 12, 2002, including amendments made to the Streamlined Sales and Use Tax
             388      Agreement after November 12, 2002.
             389          (5) "Agreement combined tax rate" means the sum of the tax rates:
             390          (a) listed under Subsection (6); and
             391          (b) that are imposed within a local taxing jurisdiction.
             392          (6) "Agreement sales and use tax" means a tax imposed under:
             393          (a) Subsection 59-12-103 (2)(a)(i)(A);
             394          (b) Subsection 59-12-103 (2)(b)(i);
             395          (c) Subsection 59-12-103 (2)(c)(i);
             396          (d) Subsection 59-12-103 (2)(d)(i)(A)(I);
             397          (e) Section 59-12-204 ;



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             398
         (f) Section 59-12-401 ;
             399          (g) Section 59-12-402 ;
             400          (h) Section 59-12-703 ;
             401          (i) Section 59-12-802 ;
             402          (j) Section 59-12-804 ;
             403          (k) Section 59-12-1102 ;
             404          (l) Section 59-12-1302 ;
             405          (m) Section 59-12-1402 ;
             406          (n) Section 59-12-1802 ;
             407          (o) Section 59-12-2003 ;
             408          (p) Section 59-12-2103 ;
             409          (q) Section 59-12-2213 ;
             410          (r) Section 59-12-2214 ;
             411          (s) Section 59-12-2215 ;
             412          (t) Section 59-12-2216 ;
             413          (u) Section 59-12-2217 ; or
             414          (v) Section 59-12-2218 .
             415          (7) "Aircraft" is as defined in Section 72-10-102 .
             416          (8) "Aircraft maintenance, repair, and overhaul provider" means a business entity:
             417          (a) except for an airline as defined in Section 59-2-102 or an affiliated group as defined
             418      in Subsection 59-12-107 (1)(f) of an airline; and
             419          (b) that has the workers, expertise, and facilities to perform the following, regardless of
             420      whether the business entity performs the following in this state:
             421          (i) check, diagnose, overhaul, and repair:
             422          (A) an onboard system of a fixed wing turbine powered aircraft; and
             423          (B) the parts that comprise an onboard system of a fixed wing turbine powered aircraft;
             424          (ii) assemble, change, dismantle, inspect, and test a fixed wing turbine powered aircraft
             425      engine;
             426          (iii) perform at least the following maintenance on a fixed wing turbine powered
             427      aircraft:
             428          (A) an inspection;



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             429
         (B) a repair, including a structural repair or modification;
             430          (C) changing landing gear; and
             431          (D) addressing issues related to an aging fixed wing turbine powered aircraft;
             432          (iv) completely remove the existing paint of a fixed wing turbine powered aircraft and
             433      completely apply new paint to the fixed wing turbine powered aircraft; and
             434          (v) refurbish the interior of a fixed wing turbine powered aircraft in a manner that
             435      results in a change in the fixed wing turbine powered aircraft's certification requirements by the
             436      authority that certifies the fixed wing turbine powered aircraft.
             437          (9) "Alcoholic beverage" means a beverage that:
             438          (a) is suitable for human consumption; and
             439          (b) contains .5% or more alcohol by volume.
             440          (10) "Alternative energy" means:
             441          (a) biomass energy;
             442          (b) geothermal energy;
             443          (c) hydroelectric energy;
             444          (d) solar energy;
             445          (e) wind energy; or
             446          (f) energy that is derived from:
             447          (i) coal-to-liquids;
             448          (ii) nuclear fuel;
             449          (iii) oil-impregnated diatomaceous earth;
             450          (iv) oil sands;
             451          (v) oil shale; or
             452          (vi) petroleum coke.
             453          (11) (a) Subject to Subsection (11)(b), "alternative energy electricity production
             454      facility" means a facility that:
             455          (i) uses alternative energy to produce electricity; and
             456          (ii) has a production capacity of 2 megawatts or greater.
             457          (b) A facility is an alternative energy electricity production facility regardless of
             458      whether the facility is:
             459          (i) connected to an electric grid; or



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             460
         (ii) located on the premises of an electricity consumer.
             461          [(10)] (12) (a) "Ancillary service" means a service associated with, or incidental to, the
             462      provision of telecommunications service.
             463          (b) "Ancillary service" includes:
             464          (i) a conference bridging service;
             465          (ii) a detailed communications billing service;
             466          (iii) directory assistance;
             467          (iv) a vertical service; or
             468          (v) a voice mail service.
             469          [(11)] (13) "Area agency on aging" is as defined in Section 62A-3-101 .
             470          [(12)] (14) "Assisted amusement device" means an amusement device, skill device, or
             471      ride device that is started and stopped by an individual:
             472          (a) who is not the purchaser or renter of the right to use or operate the amusement
             473      device, skill device, or ride device; and
             474          (b) at the direction of the seller of the right to use the amusement device, skill device,
             475      or ride device.
             476          [(13)] (15) "Assisted cleaning or washing of tangible personal property" means
             477      cleaning or washing of tangible personal property if the cleaning or washing labor is primarily
             478      performed by an individual:
             479          (a) who is not the purchaser of the cleaning or washing of the tangible personal
             480      property; and
             481          (b) at the direction of the seller of the cleaning or washing of the tangible personal
             482      property.
             483          [(14)] (16) "Authorized carrier" means:
             484          (a) in the case of vehicles operated over public highways, the holder of credentials
             485      indicating that the vehicle is or will be operated pursuant to both the International Registration
             486      Plan and the International Fuel Tax Agreement;
             487          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
             488      certificate or air carrier's operating certificate; or
             489          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             490      stock, the holder of a certificate issued by the United States Surface Transportation Board.



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             491
         [(15)] (17) (a) Except as provided in Subsection [(15)] (17)(b), "biomass energy"
             492      means any of the following that is used as the primary source of energy to produce fuel or
             493      electricity:
             494          (i) material from a plant or tree; or
             495          (ii) other organic matter that is available on a renewable basis, including:
             496          (A) slash and brush from forests and woodlands;
             497          (B) animal waste;
             498          (C) methane produced:
             499          (I) at landfills; or
             500          (II) as a byproduct of the treatment of wastewater residuals;
             501          (D) aquatic plants; and
             502          (E) agricultural products.
             503          (b) "Biomass energy" does not include:
             504          (i) black liquor;
             505          (ii) treated woods; or
             506          (iii) biomass from municipal solid waste other than methane produced:
             507          (A) at landfills; or
             508          (B) as a byproduct of the treatment of wastewater residuals.
             509          [(16)] (18) (a) "Bundled transaction" means the sale of two or more items of tangible
             510      personal property, products, or services if the tangible personal property, products, or services
             511      are:
             512          (i) distinct and identifiable; and
             513          (ii) sold for one nonitemized price.
             514          (b) "Bundled transaction" does not include:
             515          (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
             516      the basis of the selection by the purchaser of the items of tangible personal property included in
             517      the transaction;
             518          (ii) the sale of real property;
             519          (iii) the sale of services to real property;
             520          (iv) the retail sale of tangible personal property and a service if:
             521          (A) the tangible personal property:



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             522
         (I) is essential to the use of the service; and
             523          (II) is provided exclusively in connection with the service; and
             524          (B) the service is the true object of the transaction;
             525          (v) the retail sale of two services if:
             526          (A) one service is provided that is essential to the use or receipt of a second service;
             527          (B) the first service is provided exclusively in connection with the second service; and
             528          (C) the second service is the true object of the transaction;
             529          (vi) a transaction that includes tangible personal property or a product subject to
             530      taxation under this chapter and tangible personal property or a product that is not subject to
             531      taxation under this chapter if the:
             532          (A) seller's purchase price of the tangible personal property or product subject to
             533      taxation under this chapter is de minimis; or
             534          (B) seller's sales price of the tangible personal property or product subject to taxation
             535      under this chapter is de minimis; and
             536          (vii) the retail sale of tangible personal property that is not subject to taxation under
             537      this chapter and tangible personal property that is subject to taxation under this chapter if:
             538          (A) that retail sale includes:
             539          (I) food and food ingredients;
             540          (II) a drug;
             541          (III) durable medical equipment;
             542          (IV) mobility enhancing equipment;
             543          (V) an over-the-counter drug;
             544          (VI) a prosthetic device; or
             545          (VII) a medical supply; and
             546          (B) subject to Subsection [(16)] (18)(f):
             547          (I) the seller's purchase price of the tangible personal property subject to taxation under
             548      this chapter is 50% or less of the seller's total purchase price of that retail sale; or
             549          (II) the seller's sales price of the tangible personal property subject to taxation under
             550      this chapter is 50% or less of the seller's total sales price of that retail sale.
             551          (c) (i) For purposes of Subsection [(16)] (18)(a)(i), tangible personal property, a
             552      product, or a service that is distinct and identifiable does not include:



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             553
         (A) packaging that:
             554          (I) accompanies the sale of the tangible personal property, product, or service; and
             555          (II) is incidental or immaterial to the sale of the tangible personal property, product, or
             556      service;
             557          (B) tangible personal property, a product, or a service provided free of charge with the
             558      purchase of another item of tangible personal property, a product, or a service; or
             559          (C) an item of tangible personal property, a product, or a service included in the
             560      definition of "purchase price."
             561          (ii) For purposes of Subsection [(16)] (18)(c)(i)(B), an item of tangible personal
             562      property, a product, or a service is provided free of charge with the purchase of another item of
             563      tangible personal property, a product, or a service if the sales price of the purchased item of
             564      tangible personal property, product, or service does not vary depending on the inclusion of the
             565      tangible personal property, product, or service provided free of charge.
             566          (d) (i) For purposes of Subsection [(16)] (18)(a)(ii), property sold for one nonitemized
             567      price does not include a price that is separately identified by tangible personal property,
             568      product, or service on the following, regardless of whether the following is in paper format or
             569      electronic format:
             570          (A) a binding sales document; or
             571          (B) another supporting sales-related document that is available to a purchaser.
             572          (ii) For purposes of Subsection [(16)] (18)(d)(i), a binding sales document or another
             573      supporting sales-related document that is available to a purchaser includes:
             574          (A) a bill of sale;
             575          (B) a contract;
             576          (C) an invoice;
             577          (D) a lease agreement;
             578          (E) a periodic notice of rates and services;
             579          (F) a price list;
             580          (G) a rate card;
             581          (H) a receipt; or
             582          (I) a service agreement.
             583          (e) (i) For purposes of Subsection [(16)] (18)(b)(vi), the sales price of tangible personal



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             584
     property or a product subject to taxation under this chapter is de minimis if:
             585          (A) the seller's purchase price of the tangible personal property or product is 10% or
             586      less of the seller's total purchase price of the bundled transaction; or
             587          (B) the seller's sales price of the tangible personal property or product is 10% or less of
             588      the seller's total sales price of the bundled transaction.
             589          (ii) For purposes of Subsection [(16)] (18)(b)(vi), a seller:
             590          (A) shall use the seller's purchase price or the seller's sales price to determine if the
             591      purchase price or sales price of the tangible personal property or product subject to taxation
             592      under this chapter is de minimis; and
             593          (B) may not use a combination of the seller's purchase price and the seller's sales price
             594      to determine if the purchase price or sales price of the tangible personal property or product
             595      subject to taxation under this chapter is de minimis.
             596          (iii) For purposes of Subsection [(16)] (18)(b)(vi), a seller shall use the full term of a
             597      service contract to determine if the sales price of tangible personal property or a product is de
             598      minimis.
             599          (f) For purposes of Subsection [(16)] (18)(b)(vii)(B), a seller may not use a
             600      combination of the seller's purchase price and the seller's sales price to determine if tangible
             601      personal property subject to taxation under this chapter is 50% or less of the seller's total
             602      purchase price or sales price of that retail sale.
             603          [(17)] (19) "Certified automated system" means software certified by the governing
             604      board of the agreement that:
             605          (a) calculates the agreement sales and use tax imposed within a local taxing
             606      jurisdiction:
             607          (i) on a transaction; and
             608          (ii) in the states that are members of the agreement;
             609          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             610      member of the agreement; and
             611          (c) maintains a record of the transaction described in Subsection [(17)] (19)(a)(i).
             612          [(18)] (20) "Certified service provider" means an agent certified:
             613          (a) by the governing board of the agreement; and
             614          (b) to perform all of a seller's sales and use tax functions for an agreement sales and



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             615
     use tax other than the seller's obligation under Section 59-12-124 to remit a tax on the seller's
             616      own purchases.
             617          [(19)] (21) (a) Subject to Subsection [(19)] (21)(b), "clothing" means all human
             618      wearing apparel suitable for general use.
             619          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             620      commission shall make rules:
             621          (i) listing the items that constitute "clothing"; and
             622          (ii) that are consistent with the list of items that constitute "clothing" under the
             623      agreement.
             624          [(20)] (22) "Coal-to-liquid" means the process of converting coal into a liquid synthetic
             625      fuel.
             626          [(21)] (23) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or
             627      other fuels that does not constitute industrial use under Subsection [(48)] (50) or residential use
             628      under Subsection [(96)] (97).
             629          [(22)] (24) (a) "Common carrier" means a person engaged in or transacting the
             630      business of transporting passengers, freight, merchandise, or other property for hire within this
             631      state.
             632          (b) (i) "Common carrier" does not include a person who, at the time the person is
             633      traveling to or from that person's place of employment, transports a passenger to or from the
             634      passenger's place of employment.
             635          (ii) For purposes of Subsection [(22)] (24)(b)(i), in accordance with Title 63G, Chapter
             636      3, Utah Administrative Rulemaking Act, the commission may make rules defining what
             637      constitutes a person's place of employment.
             638          [(23)] (25) "Component part" includes:
             639          (a) poultry, dairy, and other livestock feed, and their components;
             640          (b) baling ties and twine used in the baling of hay and straw;
             641          (c) fuel used for providing temperature control of orchards and commercial
             642      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             643      off-highway type farm machinery; and
             644          (d) feed, seeds, and seedlings.
             645          [(24)] (26) "Computer" means an electronic device that accepts information:



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             646
         (a) (i) in digital form; or
             647          (ii) in a form similar to digital form; and
             648          (b) manipulates that information for a result based on a sequence of instructions.
             649          [(25)] (27) "Computer software" means a set of coded instructions designed to cause:
             650          (a) a computer to perform a task; or
             651          (b) automatic data processing equipment to perform a task.
             652          [(26)] (28) (a) "Conference bridging service" means an ancillary service that links two
             653      or more participants of an audio conference call or video conference call.
             654          (b) "Conference bridging service" may include providing a telephone number as part of
             655      the ancillary service described in Subsection [(26)] (28)(a).
             656          (c) "Conference bridging service" does not include a telecommunications service used
             657      to reach the ancillary service described in Subsection [(26)] (28)(a).
             658          [(27)] (29) "Construction materials" means any tangible personal property that will be
             659      converted into real property.
             660          [(28)] (30) "Delivered electronically" means delivered to a purchaser by means other
             661      than tangible storage media.
             662          [(29)] (31) (a) "Delivery charge" means a charge:
             663          (i) by a seller of:
             664          (A) tangible personal property;
             665          (B) a product transferred electronically; or
             666          (C) services; and
             667          (ii) for preparation and delivery of the tangible personal property, product transferred
             668      electronically, or services described in Subsection [(29)] (31)(a)(i) to a location designated by
             669      the purchaser.
             670          (b) "Delivery charge" includes a charge for the following:
             671          (i) transportation;
             672          (ii) shipping;
             673          (iii) postage;
             674          (iv) handling;
             675          (v) crating; or
             676          (vi) packing.



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             677
         [(30)] (32) "Detailed telecommunications billing service" means an ancillary service of
             678      separately stating information pertaining to individual calls on a customer's billing statement.
             679          [(31)] (33) "Dietary supplement" means a product, other than tobacco, that:
             680          (a) is intended to supplement the diet;
             681          (b) contains one or more of the following dietary ingredients:
             682          (i) a vitamin;
             683          (ii) a mineral;
             684          (iii) an herb or other botanical;
             685          (iv) an amino acid;
             686          (v) a dietary substance for use by humans to supplement the diet by increasing the total
             687      dietary intake; or
             688          (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
             689      described in Subsections [(31)] (33)(b)(i) through (v);
             690          (c) (i) except as provided in Subsection [(31)] (33)(c)(ii), is intended for ingestion in:
             691          (A) tablet form;
             692          (B) capsule form;
             693          (C) powder form;
             694          (D) softgel form;
             695          (E) gelcap form; or
             696          (F) liquid form; or
             697          (ii) notwithstanding Subsection [(31)] (33)(c)(i), if the product is not intended for
             698      ingestion in a form described in Subsections [(31)] (33)(c)(i)(A) through (F), is not
             699      represented:
             700          (A) as conventional food; and
             701          (B) for use as a sole item of:
             702          (I) a meal; or
             703          (II) the diet; and
             704          (d) is required to be labeled as a dietary supplement:
             705          (i) identifiable by the "Supplemental Facts" box found on the label; and
             706          (ii) as required by 21 C.F.R. Sec. 101.36.
             707          [(32)] (34) (a) "Direct mail" means printed material delivered or distributed by United



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             708
     States mail or other delivery service:
             709          (i) to:
             710          (A) a mass audience; or
             711          (B) addressees on a mailing list provided:
             712          (I) by a purchaser of the mailing list; or
             713          (II) at the discretion of the purchaser of the mailing list; and
             714          (ii) if the cost of the printed material is not billed directly to the recipients.
             715          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
             716      purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             717          (c) "Direct mail" does not include multiple items of printed material delivered to a
             718      single address.
             719          [(33)] (35) "Directory assistance" means an ancillary service of providing:
             720          (a) address information; or
             721          (b) telephone number information.
             722          [(34)] (36) (a) "Disposable home medical equipment or supplies" means medical
             723      equipment or supplies that:
             724          (i) cannot withstand repeated use; and
             725          (ii) are purchased by, for, or on behalf of a person other than:
             726          (A) a health care facility as defined in Section 26-21-2 ;
             727          (B) a health care provider as defined in Section 78B-3-403 ;
             728          (C) an office of a health care provider described in Subsection [(34)] (36)(a)(ii)(B); or
             729          (D) a person similar to a person described in Subsections [(34)] (36)(a)(ii)(A) through
             730      (C).
             731          (b) "Disposable home medical equipment or supplies" does not include:
             732          (i) a drug;
             733          (ii) durable medical equipment;
             734          (iii) a hearing aid;
             735          (iv) a hearing aid accessory;
             736          (v) mobility enhancing equipment; or
             737          (vi) tangible personal property used to correct impaired vision, including:
             738          (A) eyeglasses; or



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             739
         (B) contact lenses.
             740          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             741      commission may by rule define what constitutes medical equipment or supplies.
             742          [(35)] (37) (a) "Drug" means a compound, substance, or preparation, or a component of
             743      a compound, substance, or preparation that is:
             744          (i) recognized in:
             745          (A) the official United States Pharmacopoeia;
             746          (B) the official Homeopathic Pharmacopoeia of the United States;
             747          (C) the official National Formulary; or
             748          (D) a supplement to a publication listed in Subsections [(35)] (37)(a)(i)(A) through
             749      (C);
             750          (ii) intended for use in the:
             751          (A) diagnosis of disease;
             752          (B) cure of disease;
             753          (C) mitigation of disease;
             754          (D) treatment of disease; or
             755          (E) prevention of disease; or
             756          (iii) intended to affect:
             757          (A) the structure of the body; or
             758          (B) any function of the body.
             759          (b) "Drug" does not include:
             760          (i) food and food ingredients;
             761          (ii) a dietary supplement;
             762          (iii) an alcoholic beverage; or
             763          (iv) a prosthetic device.
             764          [(36)] (38) (a) Except as provided in Subsection [(36)] (38)(c), "durable medical
             765      equipment" means equipment that:
             766          (i) can withstand repeated use;
             767          (ii) is primarily and customarily used to serve a medical purpose;
             768          (iii) generally is not useful to a person in the absence of illness or injury; and
             769          (iv) is not worn in or on the body.



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             770
         (b) "Durable medical equipment" includes parts used in the repair or replacement of the
             771      equipment described in Subsection [(36)] (38)(a).
             772          (c) Notwithstanding Subsection [(36)] (38)(a), "durable medical equipment" does not
             773      include mobility enhancing equipment.
             774          [(37)] (39) "Electronic" means:
             775          (a) relating to technology; and
             776          (b) having:
             777          (i) electrical capabilities;
             778          (ii) digital capabilities;
             779          (iii) magnetic capabilities;
             780          (iv) wireless capabilities;
             781          (v) optical capabilities;
             782          (vi) electromagnetic capabilities; or
             783          (vii) capabilities similar to Subsections [(37)] (39)(b)(i) through (vi).
             784          [(38)] (40) "Employee" is as defined in Section 59-10-401 .
             785          [(39)] (41) "Fixed guideway" means a public transit facility that uses and occupies:
             786          (a) rail for the use of public transit; or
             787          (b) a separate right-of-way for the use of public transit.
             788          [(40)] (42) "Fixed wing turbine powered aircraft" means an aircraft that:
             789          (a) is powered by turbine engines;
             790          (b) operates on jet fuel; and
             791          (c) has wings that are permanently attached to the fuselage of the aircraft.
             792          [(41)] (43) "Fixed wireless service" means a telecommunications service that provides
             793      radio communication between fixed points.
             794          [(42)] (44) (a) "Food and food ingredients" means substances:
             795          (i) regardless of whether the substances are in:
             796          (A) liquid form;
             797          (B) concentrated form;
             798          (C) solid form;
             799          (D) frozen form;
             800          (E) dried form; or



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             801
         (F) dehydrated form; and
             802          (ii) that are:
             803          (A) sold for:
             804          (I) ingestion by humans; or
             805          (II) chewing by humans; and
             806          (B) consumed for the substance's:
             807          (I) taste; or
             808          (II) nutritional value.
             809          (b) "Food and food ingredients" includes an item described in Subsection [(79)]
             810      (82)(b)(iii).
             811          (c) "Food and food ingredients" does not include:
             812          (i) an alcoholic beverage;
             813          (ii) tobacco; or
             814          (iii) prepared food.
             815          [(43)] (45) (a) "Fundraising sales" means sales:
             816          (i) (A) made by a school; or
             817          (B) made by a school student;
             818          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             819      materials, or provide transportation; and
             820          (iii) that are part of an officially sanctioned school activity.
             821          (b) For purposes of Subsection [(43)] (45)(a)(iii), "officially sanctioned school activity"
             822      means a school activity:
             823          (i) that is conducted in accordance with a formal policy adopted by the school or school
             824      district governing the authorization and supervision of fundraising activities;
             825          (ii) that does not directly or indirectly compensate an individual teacher or other
             826      educational personnel by direct payment, commissions, or payment in kind; and
             827          (iii) the net or gross revenues from which are deposited in a dedicated account
             828      controlled by the school or school district.
             829          [(44)] (46) "Geothermal energy" means energy contained in heat that continuously
             830      flows outward from the earth that is used as the sole source of energy to produce electricity.
             831          [(45)] (47) "Governing board of the agreement" means the governing board of the



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             832
     agreement that is:
             833          (a) authorized to administer the agreement; and
             834          (b) established in accordance with the agreement.
             835          [(46)] (48) (a) For purposes of Subsection 59-12-104 (41), "governmental entity"
             836      means:
             837          (i) the executive branch of the state, including all departments, institutions, boards,
             838      divisions, bureaus, offices, commissions, and committees;
             839          (ii) the judicial branch of the state, including the courts, the Judicial Council, the
             840      Office of the Court Administrator, and similar administrative units in the judicial branch;
             841          (iii) the legislative branch of the state, including the House of Representatives, the
             842      Senate, the Legislative Printing Office, the Office of Legislative Research and General
             843      Counsel, the Office of the Legislative Auditor General, and the Office of the Legislative Fiscal
             844      Analyst;
             845          (iv) the National Guard;
             846          (v) an independent entity as defined in Section 63E-1-102 ; or
             847          (vi) a political subdivision as defined in Section 17B-1-102 .
             848          (b) "Governmental entity" does not include the state systems of public and higher
             849      education, including:
             850          (i) a college campus of the Utah College of Applied Technology;
             851          (ii) a school;
             852          (iii) the State Board of Education;
             853          (iv) the State Board of Regents; or
             854          (v) an institution of higher education.
             855          [(47)] (49) "Hydroelectric energy" means water used as the sole source of energy to
             856      produce electricity.
             857          [(48)] (50) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil,
             858      or other fuels:
             859          (a) in mining or extraction of minerals;
             860          (b) in agricultural operations to produce an agricultural product up to the time of
             861      harvest or placing the agricultural product into a storage facility, including:
             862          (i) commercial greenhouses;



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             863
         (ii) irrigation pumps;
             864          (iii) farm machinery;
             865          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             866      registered under Title 41, Chapter 1a, Part 2, Registration; and
             867          (v) other farming activities;
             868          (c) in manufacturing tangible personal property at an establishment described in SIC
             869      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             870      Executive Office of the President, Office of Management and Budget;
             871          (d) by a scrap recycler if:
             872          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             873      one or more of the following items into prepared grades of processed materials for use in new
             874      products:
             875          (A) iron;
             876          (B) steel;
             877          (C) nonferrous metal;
             878          (D) paper;
             879          (E) glass;
             880          (F) plastic;
             881          (G) textile; or
             882          (H) rubber; and
             883          (ii) the new products under Subsection [(48)] (50)(d)(i) would otherwise be made with
             884      nonrecycled materials; or
             885          (e) in producing a form of energy or steam described in Subsection 54-2-1 (2)(a) by a
             886      cogeneration facility as defined in Section 54-2-1 .
             887          [(49)] (51) (a) Except as provided in Subsection [(49)] (51)(b), "installation charge"
             888      means a charge for installing:
             889          (i) tangible personal property; or
             890          (ii) a product transferred electronically.
             891          (b) "Installation charge" does not include a charge for:
             892          (i) repairs or renovations of:
             893          (A) tangible personal property; or



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             894
         (B) a product transferred electronically; or
             895          (ii) attaching tangible personal property or a product transferred electronically:
             896          (A) to other tangible personal property; and
             897          (B) as part of a manufacturing or fabrication process.
             898          [(50)] (52) "Institution of higher education" means an institution of higher education
             899      listed in Section 53B-2-101 .
             900          [(51)] (53) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             901      personal property or a product transferred electronically for:
             902          (i) (A) a fixed term; or
             903          (B) an indeterminate term; and
             904          (ii) consideration.
             905          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
             906      amount of consideration may be increased or decreased by reference to the amount realized
             907      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             908      Code.
             909          (c) "Lease" or "rental" does not include:
             910          (i) a transfer of possession or control of property under a security agreement or
             911      deferred payment plan that requires the transfer of title upon completion of the required
             912      payments;
             913          (ii) a transfer of possession or control of property under an agreement that requires the
             914      transfer of title:
             915          (A) upon completion of required payments; and
             916          (B) if the payment of an option price does not exceed the greater of:
             917          (I) $100; or
             918          (II) 1% of the total required payments; or
             919          (iii) providing tangible personal property along with an operator for a fixed period of
             920      time or an indeterminate period of time if the operator is necessary for equipment to perform as
             921      designed.
             922          (d) For purposes of Subsection [(51)] (53)(c)(iii), an operator is necessary for
             923      equipment to perform as designed if the operator's duties exceed the:
             924          (i) set-up of tangible personal property;



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             925
         (ii) maintenance of tangible personal property; or
             926          (iii) inspection of tangible personal property.
             927          [(52)] (54) "Load and leave" means delivery to a purchaser by use of a tangible storage
             928      media if the tangible storage media is not physically transferred to the purchaser.
             929          [(53)] (55) "Local taxing jurisdiction" means a:
             930          (a) county that is authorized to impose an agreement sales and use tax;
             931          (b) city that is authorized to impose an agreement sales and use tax; or
             932          (c) town that is authorized to impose an agreement sales and use tax.
             933          [(54)] (56) "Manufactured home" is as defined in Section 15A-1-302 .
             934          [(55)] (57) For purposes of Section 59-12-104 , "manufacturing facility" means:
             935          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
             936      Industrial Classification Manual of the federal Executive Office of the President, Office of
             937      Management and Budget;
             938          (b) a scrap recycler if:
             939          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             940      one or more of the following items into prepared grades of processed materials for use in new
             941      products:
             942          (A) iron;
             943          (B) steel;
             944          (C) nonferrous metal;
             945          (D) paper;
             946          (E) glass;
             947          (F) plastic;
             948          (G) textile; or
             949          (H) rubber; and
             950          (ii) the new products under Subsection [(55)] (57)(b)(i) would otherwise be made with
             951      nonrecycled materials; or
             952          (c) a cogeneration facility as defined in Section 54-2-1 .
             953          [(56)] (58) "Member of the immediate family of the producer" means a person who is
             954      related to a producer described in Subsection 59-12-104 (20)(a) as a:
             955          (a) child or stepchild, regardless of whether the child or stepchild is:



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             956
         (i) an adopted child or adopted stepchild; or
             957          (ii) a foster child or foster stepchild;
             958          (b) grandchild or stepgrandchild;
             959          (c) grandparent or stepgrandparent;
             960          (d) nephew or stepnephew;
             961          (e) niece or stepniece;
             962          (f) parent or stepparent;
             963          (g) sibling or stepsibling;
             964          (h) spouse;
             965          (i) person who is the spouse of a person described in Subsections [(56)] (58)(a) through
             966      (g); or
             967          (j) person similar to a person described in Subsections [(56)] (58)(a) through (i) as
             968      determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             969      Administrative Rulemaking Act.
             970          [(57)] (59) "Mobile home" is as defined in Section 15A-1-302 .
             971          [(58)] (60) "Mobile telecommunications service" is as defined in the Mobile
             972      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             973          [(59)] (61) (a) "Mobile wireless service" means a telecommunications service,
             974      regardless of the technology used, if:
             975          (i) the origination point of the conveyance, routing, or transmission is not fixed;
             976          (ii) the termination point of the conveyance, routing, or transmission is not fixed; or
             977          (iii) the origination point described in Subsection [(59)] (61)(a)(i) and the termination
             978      point described in Subsection [(59)] (61)(a)(ii) are not fixed.
             979          (b) "Mobile wireless service" includes a telecommunications service that is provided
             980      by a commercial mobile radio service provider.
             981          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             982      commission may by rule define "commercial mobile radio service provider."
             983          [(60)] (62) (a) Except as provided in Subsection [(60)] (62)(c), "mobility enhancing
             984      equipment" means equipment that is:
             985          (i) primarily and customarily used to provide or increase the ability to move from one
             986      place to another;



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             987
         (ii) appropriate for use in a:
             988          (A) home; or
             989          (B) motor vehicle; and
             990          (iii) not generally used by persons with normal mobility.
             991          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
             992      the equipment described in Subsection [(60)] (62)(a).
             993          (c) Notwithstanding Subsection [(60)] (62)(a), "mobility enhancing equipment" does
             994      not include:
             995          (i) a motor vehicle;
             996          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
             997      vehicle manufacturer;
             998          (iii) durable medical equipment; or
             999          (iv) a prosthetic device.
             1000          [(61)] (63) "Model 1 seller" means a seller registered under the agreement that has
             1001      selected a certified service provider as the seller's agent to perform all of the seller's sales and
             1002      use tax functions for agreement sales and use taxes other than the seller's obligation under
             1003      Section 59-12-124 to remit a tax on the seller's own purchases.
             1004          [(62)] (64) "Model 2 seller" means a seller registered under the agreement that:
             1005          (a) except as provided in Subsection [(62)] (64)(b), has selected a certified automated
             1006      system to perform the seller's sales tax functions for agreement sales and use taxes; and
             1007          (b) notwithstanding Subsection [(62)] (64)(a), retains responsibility for remitting all of
             1008      the sales tax:
             1009          (i) collected by the seller; and
             1010          (ii) to the appropriate local taxing jurisdiction.
             1011          [(63)] (65) (a) Subject to Subsection [(63)] (65)(b), "model 3 seller" means a seller
             1012      registered under the agreement that has:
             1013          (i) sales in at least five states that are members of the agreement;
             1014          (ii) total annual sales revenues of at least $500,000,000;
             1015          (iii) a proprietary system that calculates the amount of tax:
             1016          (A) for an agreement sales and use tax; and
             1017          (B) due to each local taxing jurisdiction; and



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             1018
         (iv) entered into a performance agreement with the governing board of the agreement.
             1019          (b) For purposes of Subsection [(63)] (65)(a), "model 3 seller" includes an affiliated
             1020      group of sellers using the same proprietary system.
             1021          [(64)] (66) "Model 4 seller" means a seller that is registered under the agreement and is
             1022      not a model 1 seller, model 2 seller, or model 3 seller.
             1023          [(65)] (67) "Modular home" means a modular unit as defined in Section 15A-1-302 .
             1024          [(66)] (68) "Motor vehicle" is as defined in Section 41-1a-102 .
             1025          (69) "Oil sands" means impregnated bituminous sands that:
             1026          (a) contain a heavy, thick form of petroleum that is released when heated, mixed with
             1027      other hydrocarbons, or otherwise treated;
             1028          (b) yield mixtures of liquid hydrocarbon; and
             1029          (c) require further processing other than mechanical blending before becoming finished
             1030      petroleum products.
             1031          [(67)] (70) "Oil shale" means a group of fine black to dark brown shales containing
             1032      [bituminous] kerogen material that yields petroleum upon heating and distillation.
             1033          [(68)] (71) (a) "Other fuels" means products that burn independently to produce heat or
             1034      energy.
             1035          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             1036      personal property.
             1037          [(69)] (72) (a) "Paging service" means a telecommunications service that provides
             1038      transmission of a coded radio signal for the purpose of activating a specific pager.
             1039          (b) For purposes of Subsection [(69)] (72)(a), the transmission of a coded radio signal
             1040      includes a transmission by message or sound.
             1041          [(70)] (73) "Pawnbroker" is as defined in Section 13-32a-102 .
             1042          [(71)] (74) "Pawn transaction" is as defined in Section 13-32a-102 .
             1043          [(72)] (75) (a) "Permanently attached to real property" means that for tangible personal
             1044      property attached to real property:
             1045          (i) the attachment of the tangible personal property to the real property:
             1046          (A) is essential to the use of the tangible personal property; and
             1047          (B) suggests that the tangible personal property will remain attached to the real
             1048      property in the same place over the useful life of the tangible personal property; or



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             1049
         (ii) if the tangible personal property is detached from the real property, the detachment
             1050      would:
             1051          (A) cause substantial damage to the tangible personal property; or
             1052          (B) require substantial alteration or repair of the real property to which the tangible
             1053      personal property is attached.
             1054          (b) "Permanently attached to real property" includes:
             1055          (i) the attachment of an accessory to the tangible personal property if the accessory is:
             1056          (A) essential to the operation of the tangible personal property; and
             1057          (B) attached only to facilitate the operation of the tangible personal property;
             1058          (ii) a temporary detachment of tangible personal property from real property for a
             1059      repair or renovation if the repair or renovation is performed where the tangible personal
             1060      property and real property are located; or
             1061          (iii) property attached to oil, gas, or water pipelines, except for the property listed in
             1062      Subsection [(72)] (75)(c)(iii) or (iv).
             1063          (c) "Permanently attached to real property" does not include:
             1064          (i) the attachment of portable or movable tangible personal property to real property if
             1065      that portable or movable tangible personal property is attached to real property only for:
             1066          (A) convenience;
             1067          (B) stability; or
             1068          (C) for an obvious temporary purpose;
             1069          (ii) the detachment of tangible personal property from real property except for the
             1070      detachment described in Subsection [(72)] (75)(b)(ii);
             1071          (iii) an attachment of the following tangible personal property to real property if the
             1072      attachment to real property is only through a line that supplies water, electricity, gas,
             1073      telecommunications, cable, or supplies a similar item as determined by the commission by rule
             1074      made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
             1075          (A) a computer;
             1076          (B) a telephone;
             1077          (C) a television; or
             1078          (D) tangible personal property similar to Subsections [(72)] (75)(c)(iii)(A) through (C)
             1079      as determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah



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             1080
     Administrative Rulemaking Act; or
             1081          (iv) an item listed in Subsection [(113)] (114)(c).
             1082          [(73)] (76) "Person" includes any individual, firm, partnership, joint venture,
             1083      association, corporation, estate, trust, business trust, receiver, syndicate, this state, any county,
             1084      city, municipality, district, or other local governmental entity of the state, or any group or
             1085      combination acting as a unit.
             1086          [(74)] (77) "Place of primary use":
             1087          (a) for telecommunications service other than mobile telecommunications service,
             1088      means the street address representative of where the customer's use of the telecommunications
             1089      service primarily occurs, which shall be:
             1090          (i) the residential street address of the customer; or
             1091          (ii) the primary business street address of the customer; or
             1092          (b) for mobile telecommunications service, is as defined in the Mobile
             1093      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             1094          [(75)] (78) (a) "Postpaid calling service" means a telecommunications service a person
             1095      obtains by making a payment on a call-by-call basis:
             1096          (i) through the use of a:
             1097          (A) bank card;
             1098          (B) credit card;
             1099          (C) debit card; or
             1100          (D) travel card; or
             1101          (ii) by a charge made to a telephone number that is not associated with the origination
             1102      or termination of the telecommunications service.
             1103          (b) "Postpaid calling service" includes a service, except for a prepaid wireless calling
             1104      service, that would be a prepaid wireless calling service if the service were exclusively a
             1105      telecommunications service.
             1106          [(76)] (79) "Postproduction" means an activity related to the finishing or duplication of
             1107      a medium described in Subsection 59-12-104 (54)(a).
             1108          [(77)] (80) "Prepaid calling service" means a telecommunications service:
             1109          (a) that allows a purchaser access to telecommunications service that is exclusively
             1110      telecommunications service;



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             1111
         (b) that:
             1112          (i) is paid for in advance; and
             1113          (ii) enables the origination of a call using an:
             1114          (A) access number; or
             1115          (B) authorization code;
             1116          (c) that is dialed:
             1117          (i) manually; or
             1118          (ii) electronically; and
             1119          (d) sold in predetermined units or dollars that decline:
             1120          (i) by a known amount; and
             1121          (ii) with use.
             1122          [(78)] (81) "Prepaid wireless calling service" means a telecommunications service:
             1123          (a) that provides the right to utilize:
             1124          (i) mobile wireless service; and
             1125          (ii) other service that is not a telecommunications service, including:
             1126          (A) the download of a product transferred electronically;
             1127          (B) a content service; or
             1128          (C) an ancillary service;
             1129          (b) that:
             1130          (i) is paid for in advance; and
             1131          (ii) enables the origination of a call using an:
             1132          (A) access number; or
             1133          (B) authorization code;
             1134          (c) that is dialed:
             1135          (i) manually; or
             1136          (ii) electronically; and
             1137          (d) sold in predetermined units or dollars that decline:
             1138          (i) by a known amount; and
             1139          (ii) with use.
             1140          [(79)] (82) (a) "Prepared food" means:
             1141          (i) food:



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             1142
         (A) sold in a heated state; or
             1143          (B) heated by a seller;
             1144          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             1145      item; or
             1146          (iii) except as provided in Subsection [(79)] (82)(c), food sold with an eating utensil
             1147      provided by the seller, including a:
             1148          (A) plate;
             1149          (B) knife;
             1150          (C) fork;
             1151          (D) spoon;
             1152          (E) glass;
             1153          (F) cup;
             1154          (G) napkin; or
             1155          (H) straw.
             1156          (b) "Prepared food" does not include:
             1157          (i) food that a seller only:
             1158          (A) cuts;
             1159          (B) repackages; or
             1160          (C) pasteurizes; or
             1161          (ii) (A) the following:
             1162          (I) raw egg;
             1163          (II) raw fish;
             1164          (III) raw meat;
             1165          (IV) raw poultry; or
             1166          (V) a food containing an item described in Subsections [(79)] (82)(b)(ii)(A)(I) through
             1167      (IV); and
             1168          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             1169      Food and Drug Administration's Food Code that a consumer cook the items described in
             1170      Subsection [(79)] (82)(b)(ii)(A) to prevent food borne illness; or
             1171          (iii) the following if sold without eating utensils provided by the seller:
             1172          (A) food and food ingredients sold by a seller if the seller's proper primary



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             1173
     classification under the 2002 North American Industry Classification System of the federal
             1174      Executive Office of the President, Office of Management and Budget, is manufacturing in
             1175      Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
             1176      Manufacturing;
             1177          (B) food and food ingredients sold in an unheated state:
             1178          (I) by weight or volume; and
             1179          (II) as a single item; or
             1180          (C) a bakery item, including:
             1181          (I) a bagel;
             1182          (II) a bar;
             1183          (III) a biscuit;
             1184          (IV) bread;
             1185          (V) a bun;
             1186          (VI) a cake;
             1187          (VII) a cookie;
             1188          (VIII) a croissant;
             1189          (IX) a danish;
             1190          (X) a donut;
             1191          (XI) a muffin;
             1192          (XII) a pastry;
             1193          (XIII) a pie;
             1194          (XIV) a roll;
             1195          (XV) a tart;
             1196          (XVI) a torte; or
             1197          (XVII) a tortilla.
             1198          (c) Notwithstanding Subsection [(79)] (82)(a)(iii), an eating utensil provided by the
             1199      seller does not include the following used to transport the food:
             1200          (i) a container; or
             1201          (ii) packaging.
             1202          [(80)] (83) "Prescription" means an order, formula, or recipe that is issued:
             1203          (a) (i) orally;



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             1204
         (ii) in writing;
             1205          (iii) electronically; or
             1206          (iv) by any other manner of transmission; and
             1207          (b) by a licensed practitioner authorized by the laws of a state.
             1208          [(81)] (84) (a) Except as provided in Subsection [(81)] (84)(b)(ii) or (iii), "prewritten
             1209      computer software" means computer software that is not designed and developed:
             1210          (i) by the author or other creator of the computer software; and
             1211          (ii) to the specifications of a specific purchaser.
             1212          (b) "Prewritten computer software" includes:
             1213          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
             1214      software is not designed and developed:
             1215          (A) by the author or other creator of the computer software; and
             1216          (B) to the specifications of a specific purchaser;
             1217          (ii) notwithstanding Subsection [(81)] (84)(a), computer software designed and
             1218      developed by the author or other creator of the computer software to the specifications of a
             1219      specific purchaser if the computer software is sold to a person other than the purchaser; or
             1220          (iii) notwithstanding Subsection [(81)] (84)(a) and except as provided in Subsection
             1221      [(81)](84)(c), prewritten computer software or a prewritten portion of prewritten computer
             1222      software:
             1223          (A) that is modified or enhanced to any degree; and
             1224          (B) if the modification or enhancement described in Subsection [(81)] (84)(b)(iii)(A) is
             1225      designed and developed to the specifications of a specific purchaser.
             1226          (c) Notwithstanding Subsection [(81)] (84)(b)(iii), "prewritten computer software"
             1227      does not include a modification or enhancement described in Subsection [(81)] (84)(b)(iii) if
             1228      the charges for the modification or enhancement are:
             1229          (i) reasonable; and
             1230          (ii) separately stated on the invoice or other statement of price provided to the
             1231      purchaser.
             1232          [(82)] (85) (a) "Private communication service" means a telecommunications service:
             1233          (i) that entitles a customer to exclusive or priority use of one or more communications
             1234      channels between or among termination points; and



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             1235
         (ii) regardless of the manner in which the one or more communications channels are
             1236      connected.
             1237          (b) "Private communications service" includes the following provided in connection
             1238      with the use of one or more communications channels:
             1239          (i) an extension line;
             1240          (ii) a station;
             1241          (iii) switching capacity; or
             1242          (iv) another associated service that is provided in connection with the use of one or
             1243      more communications channels as defined in Section 59-12-215 .
             1244          [(83)] (86) (a) Except as provided in Subsection [(83)] (86)(b), "product transferred
             1245      electronically" means a product transferred electronically that would be subject to a tax under
             1246      this chapter if that product was transferred in a manner other than electronically.
             1247          (b) "Product transferred electronically" does not include:
             1248          (i) an ancillary service;
             1249          (ii) computer software; or
             1250          (iii) a telecommunications service.
             1251          [(84)] (87) (a) "Prosthetic device" means a device that is worn on or in the body to:
             1252          (i) artificially replace a missing portion of the body;
             1253          (ii) prevent or correct a physical deformity or physical malfunction; or
             1254          (iii) support a weak or deformed portion of the body.
             1255          (b) "Prosthetic device" includes:
             1256          (i) parts used in the repairs or renovation of a prosthetic device;
             1257          (ii) replacement parts for a prosthetic device;
             1258          (iii) a dental prosthesis; or
             1259          (iv) a hearing aid.
             1260          (c) "Prosthetic device" does not include:
             1261          (i) corrective eyeglasses; or
             1262          (ii) contact lenses.
             1263          [(85)] (88) (a) "Protective equipment" means an item:
             1264          (i) for human wear; and
             1265          (ii) that is:



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             1266
         (A) designed as protection:
             1267          (I) to the wearer against injury or disease; or
             1268          (II) against damage or injury of other persons or property; and
             1269          (B) not suitable for general use.
             1270          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1271      commission shall make rules:
             1272          (i) listing the items that constitute "protective equipment"; and
             1273          (ii) that are consistent with the list of items that constitute "protective equipment"
             1274      under the agreement.
             1275          [(86)] (89) (a) For purposes of Subsection 59-12-104 (41), "publication" means any
             1276      written or printed matter, other than a photocopy:
             1277          (i) regardless of:
             1278          (A) characteristics;
             1279          (B) copyright;
             1280          (C) form;
             1281          (D) format;
             1282          (E) method of reproduction; or
             1283          (F) source; and
             1284          (ii) made available in printed or electronic format.
             1285          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1286      commission may by rule define the term "photocopy."
             1287          [(87)] (90) (a) "Purchase price" and "sales price" mean the total amount of
             1288      consideration:
             1289          (i) valued in money; and
             1290          (ii) for which tangible personal property, a product transferred electronically, or
             1291      services are:
             1292          (A) sold;
             1293          (B) leased; or
             1294          (C) rented.
             1295          (b) "Purchase price" and "sales price" include:
             1296          (i) the seller's cost of the tangible personal property, a product transferred



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             1297
     electronically, or services sold;
             1298          (ii) expenses of the seller, including:
             1299          (A) the cost of materials used;
             1300          (B) a labor cost;
             1301          (C) a service cost;
             1302          (D) interest;
             1303          (E) a loss;
             1304          (F) the cost of transportation to the seller; or
             1305          (G) a tax imposed on the seller;
             1306          (iii) a charge by the seller for any service necessary to complete the sale; or
             1307          (iv) consideration a seller receives from a person other than the purchaser if:
             1308          (A) (I) the seller actually receives consideration from a person other than the purchaser;
             1309      and
             1310          (II) the consideration described in Subsection [(87)] (90)(b)(iv)(A)(I) is directly related
             1311      to a price reduction or discount on the sale;
             1312          (B) the seller has an obligation to pass the price reduction or discount through to the
             1313      purchaser;
             1314          (C) the amount of the consideration attributable to the sale is fixed and determinable by
             1315      the seller at the time of the sale to the purchaser; and
             1316          (D) (I) (Aa) the purchaser presents a certificate, coupon, or other documentation to the
             1317      seller to claim a price reduction or discount; and
             1318          (Bb) a person other than the seller authorizes, distributes, or grants the certificate,
             1319      coupon, or other documentation with the understanding that the person other than the seller
             1320      will reimburse any seller to whom the certificate, coupon, or other documentation is presented;
             1321          (II) the purchaser identifies that purchaser to the seller as a member of a group or
             1322      organization allowed a price reduction or discount, except that a preferred customer card that is
             1323      available to any patron of a seller does not constitute membership in a group or organization
             1324      allowed a price reduction or discount; or
             1325          (III) the price reduction or discount is identified as a third party price reduction or
             1326      discount on the:
             1327          (Aa) invoice the purchaser receives; or



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             1328
         (Bb) certificate, coupon, or other documentation the purchaser presents.
             1329          (c) "Purchase price" and "sales price" do not include:
             1330          (i) a discount:
             1331          (A) in a form including:
             1332          (I) cash;
             1333          (II) term; or
             1334          (III) coupon;
             1335          (B) that is allowed by a seller;
             1336          (C) taken by a purchaser on a sale; and
             1337          (D) that is not reimbursed by a third party; or
             1338          (ii) the following if separately stated on an invoice, bill of sale, or similar document
             1339      provided to the purchaser:
             1340          (A) the following from credit extended on the sale of tangible personal property or
             1341      services:
             1342          (I) a carrying charge;
             1343          (II) a financing charge; or
             1344          (III) an interest charge;
             1345          (B) a delivery charge;
             1346          (C) an installation charge;
             1347          (D) a manufacturer rebate on a motor vehicle; or
             1348          (E) a tax or fee legally imposed directly on the consumer.
             1349          [(88)] (91) "Purchaser" means a person to whom:
             1350          (a) a sale of tangible personal property is made;
             1351          (b) a product is transferred electronically; or
             1352          (c) a service is furnished.
             1353          [(89)] (92) "Regularly rented" means:
             1354          (a) rented to a guest for value three or more times during a calendar year; or
             1355          (b) advertised or held out to the public as a place that is regularly rented to guests for
             1356      value.
             1357          [(90) "Renewable energy" means:]
             1358          [(a) biomass energy;]



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             1359
         [(b) hydroelectric energy;]
             1360          [(c) geothermal energy;]
             1361          [(d) solar energy; or]
             1362          [(e) wind energy.]
             1363          [(91) (a) "Renewable energy production facility" means a facility that:]
             1364          [(i) uses renewable energy to produce electricity; and]
             1365          [(ii) has a production capacity of 20 kilowatts or greater.]
             1366          [(b) A facility is a renewable energy production facility regardless of whether the
             1367      facility is:]
             1368          [(i) connected to an electric grid; or]
             1369          [(ii) located on the premises of an electricity consumer.]
             1370          [(92)] (93) "Rental" is as defined in Subsection [(51)] (53).
             1371          [(93)] (94) (a) Except as provided in Subsection [(93)] (94)(b), "repairs or renovations
             1372      of tangible personal property" means:
             1373          (i) a repair or renovation of tangible personal property that is not permanently attached
             1374      to real property; or
             1375          (ii) attaching tangible personal property or a product transferred electronically to other
             1376      tangible personal property if:
             1377          (A) the other tangible personal property to which the tangible personal property or
             1378      product transferred electronically is attached is not permanently attached to real property; and
             1379          (B) the attachment of tangible personal property or a product transferred electronically
             1380      to other tangible personal property is made in conjunction with a repair or replacement of
             1381      tangible personal property or a product transferred electronically.
             1382          (b) "Repairs or renovations of tangible personal property" does not include attaching
             1383      prewritten computer software to other tangible personal property if the other tangible personal
             1384      property to which the prewritten computer software is attached is not permanently attached to
             1385      real property.
             1386          [(94)] (95) "Research and development" means the process of inquiry or
             1387      experimentation aimed at the discovery of facts, devices, technologies, or applications and the
             1388      process of preparing those devices, technologies, or applications for marketing.
             1389          [(95)] (96) (a) "Residential telecommunications services" means a telecommunications



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             1390
     service or an ancillary service that is provided to an individual for personal use:
             1391          (i) at a residential address; or
             1392          (ii) at an institution, including a nursing home or a school, if the telecommunications
             1393      service or ancillary service is provided to and paid for by the individual residing at the
             1394      institution rather than the institution.
             1395          (b) For purposes of Subsection [(95)] (96)(a)(i), a residential address includes an:
             1396          (i) apartment; or
             1397          (ii) other individual dwelling unit.
             1398          [(96)] (97) "Residential use" means the use in or around a home, apartment building,
             1399      sleeping quarters, and similar facilities or accommodations.
             1400          [(97)] (98) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose
             1401      other than:
             1402          (a) resale;
             1403          (b) sublease; or
             1404          (c) subrent.
             1405          [(98)] (99) (a) "Retailer" means any person engaged in a regularly organized business
             1406      in tangible personal property or any other taxable transaction under Subsection 59-12-103 (1),
             1407      and who is selling to the user or consumer and not for resale.
             1408          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             1409      engaged in the business of selling to users or consumers within the state.
             1410          [(99)] (100) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             1411      otherwise, in any manner, of tangible personal property or any other taxable transaction under
             1412      Subsection 59-12-103 (1), for consideration.
             1413          (b) "Sale" includes:
             1414          (i) installment and credit sales;
             1415          (ii) any closed transaction constituting a sale;
             1416          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
             1417      chapter;
             1418          (iv) any transaction if the possession of property is transferred but the seller retains the
             1419      title as security for the payment of the price; and
             1420          (v) any transaction under which right to possession, operation, or use of any article of



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             1421
     tangible personal property is granted under a lease or contract and the transfer of possession
             1422      would be taxable if an outright sale were made.
             1423          [(100)] (101) "Sale at retail" is as defined in Subsection [(97)] (98).
             1424          [(101)] (102) "Sale-leaseback transaction" means a transaction by which title to
             1425      tangible personal property or a product transferred electronically that is subject to a tax under
             1426      this chapter is transferred:
             1427          (a) by a purchaser-lessee;
             1428          (b) to a lessor;
             1429          (c) for consideration; and
             1430          (d) if:
             1431          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             1432      of the tangible personal property or product transferred electronically;
             1433          (ii) the sale of the tangible personal property or product transferred electronically to the
             1434      lessor is intended as a form of financing:
             1435          (A) for the tangible personal property or product transferred electronically; and
             1436          (B) to the purchaser-lessee; and
             1437          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             1438      is required to:
             1439          (A) capitalize the tangible personal property or product transferred electronically for
             1440      financial reporting purposes; and
             1441          (B) account for the lease payments as payments made under a financing arrangement.
             1442          [(102)] (103) "Sales price" is as defined in Subsection [(87)] (90).
             1443          [(103)] (104) (a) "Sales relating to schools" means the following sales by, amounts
             1444      paid to, or amounts charged by a school:
             1445          (i) sales that are directly related to the school's educational functions or activities
             1446      including:
             1447          (A) the sale of:
             1448          (I) textbooks;
             1449          (II) textbook fees;
             1450          (III) laboratory fees;
             1451          (IV) laboratory supplies; or



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             1452
         (V) safety equipment;
             1453          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             1454      that:
             1455          (I) a student is specifically required to wear as a condition of participation in a
             1456      school-related event or school-related activity; and
             1457          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             1458      place of ordinary clothing;
             1459          (C) sales of the following if the net or gross revenues generated by the sales are
             1460      deposited into a school district fund or school fund dedicated to school meals:
             1461          (I) food and food ingredients; or
             1462          (II) prepared food; or
             1463          (D) transportation charges for official school activities; or
             1464          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             1465      event or school-related activity.
             1466          (b) "Sales relating to schools" does not include:
             1467          (i) bookstore sales of items that are not educational materials or supplies;
             1468          (ii) except as provided in Subsection [(103)] (104)(a)(i)(B):
             1469          (A) clothing;
             1470          (B) clothing accessories or equipment;
             1471          (C) protective equipment; or
             1472          (D) sports or recreational equipment; or
             1473          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             1474      event or school-related activity if the amounts paid or charged are passed through to a person:
             1475          (A) other than a:
             1476          (I) school;
             1477          (II) nonprofit organization authorized by a school board or a governing body of a
             1478      private school to organize and direct a competitive secondary school activity; or
             1479          (III) nonprofit association authorized by a school board or a governing body of a
             1480      private school to organize and direct a competitive secondary school activity; and
             1481          (B) that is required to collect sales and use taxes under this chapter.
             1482          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the



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             1483
     commission may make rules defining the term "passed through."
             1484          [(104)] (105) For purposes of this section and Section 59-12-104 , "school":
             1485          (a) means:
             1486          (i) an elementary school or a secondary school that:
             1487          (A) is a:
             1488          (I) public school; or
             1489          (II) private school; and
             1490          (B) provides instruction for one or more grades kindergarten through 12; or
             1491          (ii) a public school district; and
             1492          (b) includes the Electronic High School as defined in Section 53A-15-1002 .
             1493          [(105)] (106) "Seller" means a person that makes a sale, lease, or rental of:
             1494          (a) tangible personal property;
             1495          (b) a product transferred electronically; or
             1496          (c) a service.
             1497          [(106)] (107) (a) "Semiconductor fabricating, processing, research, or development
             1498      materials" means tangible personal property or a product transferred electronically if the
             1499      tangible personal property or product transferred electronically is:
             1500          (i) used primarily in the process of:
             1501          (A) (I) manufacturing a semiconductor;
             1502          (II) fabricating a semiconductor; or
             1503          (III) research or development of a:
             1504          (Aa) semiconductor; or
             1505          (Bb) semiconductor manufacturing process; or
             1506          (B) maintaining an environment suitable for a semiconductor; or
             1507          (ii) consumed primarily in the process of:
             1508          (A) (I) manufacturing a semiconductor;
             1509          (II) fabricating a semiconductor; or
             1510          (III) research or development of a:
             1511          (Aa) semiconductor; or
             1512          (Bb) semiconductor manufacturing process; or
             1513          (B) maintaining an environment suitable for a semiconductor.



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             1514
         (b) "Semiconductor fabricating, processing, research, or development materials"
             1515      includes:
             1516          (i) parts used in the repairs or renovations of tangible personal property or a product
             1517      transferred electronically described in Subsection [(106)] (107)(a); or
             1518          (ii) a chemical, catalyst, or other material used to:
             1519          (A) produce or induce in a semiconductor a:
             1520          (I) chemical change; or
             1521          (II) physical change;
             1522          (B) remove impurities from a semiconductor; or
             1523          (C) improve the marketable condition of a semiconductor.
             1524          [(107)] (108) "Senior citizen center" means a facility having the primary purpose of
             1525      providing services to the aged as defined in Section 62A-3-101 .
             1526          [(108)] (109) "Simplified electronic return" means the electronic return:
             1527          (a) described in Section 318(C) of the agreement; and
             1528          (b) approved by the governing board of the agreement.
             1529          [(109)] (110) "Solar energy" means the sun used as the sole source of energy for
             1530      producing electricity.
             1531          [(110)] (111) (a) "Sports or recreational equipment" means an item:
             1532          (i) designed for human use; and
             1533          (ii) that is:
             1534          (A) worn in conjunction with:
             1535          (I) an athletic activity; or
             1536          (II) a recreational activity; and
             1537          (B) not suitable for general use.
             1538          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1539      commission shall make rules:
             1540          (i) listing the items that constitute "sports or recreational equipment"; and
             1541          (ii) that are consistent with the list of items that constitute "sports or recreational
             1542      equipment" under the agreement.
             1543          [(111)] (112) "State" means the state of Utah, its departments, and agencies.
             1544          [(112)] (113) "Storage" means any keeping or retention of tangible personal property or



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             1545
     any other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose
             1546      except sale in the regular course of business.
             1547          [(113)] (114) (a) Except as provided in Subsection [(113)] (114)(d) or (e), "tangible
             1548      personal property" means personal property that:
             1549          (i) may be:
             1550          (A) seen;
             1551          (B) weighed;
             1552          (C) measured;
             1553          (D) felt; or
             1554          (E) touched; or
             1555          (ii) is in any manner perceptible to the senses.
             1556          (b) "Tangible personal property" includes:
             1557          (i) electricity;
             1558          (ii) water;
             1559          (iii) gas;
             1560          (iv) steam; or
             1561          (v) prewritten computer software, regardless of the manner in which the prewritten
             1562      computer software is transferred.
             1563          (c) "Tangible personal property" includes the following regardless of whether the item
             1564      is attached to real property:
             1565          (i) a dishwasher;
             1566          (ii) a dryer;
             1567          (iii) a freezer;
             1568          (iv) a microwave;
             1569          (v) a refrigerator;
             1570          (vi) a stove;
             1571          (vii) a washer; or
             1572          (viii) an item similar to Subsections [(113)] (114)(c)(i) through (vii) as determined by
             1573      the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1574      Rulemaking Act.
             1575          (d) "Tangible personal property" does not include a product that is transferred



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     electronically.
             1577          (e) "Tangible personal property" does not include the following if attached to real
             1578      property, regardless of whether the attachment to real property is only through a line that
             1579      supplies water, electricity, gas, telephone, cable, or supplies a similar item as determined by the
             1580      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1581      Rulemaking Act:
             1582          (i) a hot water heater;
             1583          (ii) a water filtration system; or
             1584          (iii) a water softener system.
             1585          [(114) "Tar sands" means impregnated sands that yield mixtures of liquid hydrocarbon
             1586      and require further processing other than mechanical blending before becoming finished
             1587      petroleum products.]
             1588          (115) (a) "Telecommunications enabling or facilitating equipment, machinery, or
             1589      software" means an item listed in Subsection (115)(b) if that item is purchased or leased
             1590      primarily to enable or facilitate one or more of the following to function:
             1591          (i) telecommunications switching or routing equipment, machinery, or software; or
             1592          (ii) telecommunications transmission equipment, machinery, or software.
             1593          (b) The following apply to Subsection (115)(a):
             1594          (i) a pole;
             1595          (ii) software;
             1596          (iii) a supplementary power supply;
             1597          (iv) temperature or environmental equipment or machinery;
             1598          (v) test equipment;
             1599          (vi) a tower; or
             1600          (vii) equipment, machinery, or software that functions similarly to an item listed in
             1601      Subsections (115)(b)(i) through (vi) as determined by the commission by rule made in
             1602      accordance with Subsection (115)(c).
             1603          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1604      commission may by rule define what constitutes equipment, machinery, or software that
             1605      functions similarly to an item listed in Subsections (115)(b)(i) through (vi).
             1606          (116) "Telecommunications equipment, machinery, or software required for 911



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             1607
     service" means equipment, machinery, or software that is required to comply with 47 C.F.R.
             1608      Sec. 20.18.
             1609          (117) "Telecommunications maintenance or repair equipment, machinery, or software"
             1610      means equipment, machinery, or software purchased or leased primarily to maintain or repair
             1611      one or more of the following, regardless of whether the equipment, machinery, or software is
             1612      purchased or leased as a spare part or as an upgrade or modification to one or more of the
             1613      following:
             1614          (a) telecommunications enabling or facilitating equipment, machinery, or software;
             1615          (b) telecommunications switching or routing equipment, machinery, or software; or
             1616          (c) telecommunications transmission equipment, machinery, or software.
             1617          (118) (a) "Telecommunications service" means the electronic conveyance, routing, or
             1618      transmission of audio, data, video, voice, or any other information or signal to a point, or
             1619      among or between points.
             1620          (b) "Telecommunications service" includes:
             1621          (i) an electronic conveyance, routing, or transmission with respect to which a computer
             1622      processing application is used to act:
             1623          (A) on the code, form, or protocol of the content;
             1624          (B) for the purpose of electronic conveyance, routing, or transmission; and
             1625          (C) regardless of whether the service:
             1626          (I) is referred to as voice over Internet protocol service; or
             1627          (II) is classified by the Federal Communications Commission as enhanced or value
             1628      added;
             1629          (ii) an 800 service;
             1630          (iii) a 900 service;
             1631          (iv) a fixed wireless service;
             1632          (v) a mobile wireless service;
             1633          (vi) a postpaid calling service;
             1634          (vii) a prepaid calling service;
             1635          (viii) a prepaid wireless calling service; or
             1636          (ix) a private communications service.
             1637          (c) "Telecommunications service" does not include:



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             1638
         (i) advertising, including directory advertising;
             1639          (ii) an ancillary service;
             1640          (iii) a billing and collection service provided to a third party;
             1641          (iv) a data processing and information service if:
             1642          (A) the data processing and information service allows data to be:
             1643          (I) (Aa) acquired;
             1644          (Bb) generated;
             1645          (Cc) processed;
             1646          (Dd) retrieved; or
             1647          (Ee) stored; and
             1648          (II) delivered by an electronic transmission to a purchaser; and
             1649          (B) the purchaser's primary purpose for the underlying transaction is the processed data
             1650      or information;
             1651          (v) installation or maintenance of the following on a customer's premises:
             1652          (A) equipment; or
             1653          (B) wiring;
             1654          (vi) Internet access service;
             1655          (vii) a paging service;
             1656          (viii) a product transferred electronically, including:
             1657          (A) music;
             1658          (B) reading material;
             1659          (C) a ring tone;
             1660          (D) software; or
             1661          (E) video;
             1662          (ix) a radio and television audio and video programming service:
             1663          (A) regardless of the medium; and
             1664          (B) including:
             1665          (I) furnishing conveyance, routing, or transmission of a television audio and video
             1666      programming service by a programming service provider;
             1667          (II) cable service as defined in 47 U.S.C. Sec. 522(6); or
             1668          (III) audio and video programming services delivered by a commercial mobile radio



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             1669
     service provider as defined in 47 C.F.R. Sec. 20.3;
             1670          (x) a value-added nonvoice data service; or
             1671          (xi) tangible personal property.
             1672          (119) (a) "Telecommunications service provider" means a person that:
             1673          (i) owns, controls, operates, or manages a telecommunications service; and
             1674          (ii) engages in an activity described in Subsection (119)(a)(i) for the shared use with or
             1675      resale to any person of the telecommunications service.
             1676          (b) A person described in Subsection (119)(a) is a telecommunications service provider
             1677      whether or not the Public Service Commission of Utah regulates:
             1678          (i) that person; or
             1679          (ii) the telecommunications service that the person owns, controls, operates, or
             1680      manages.
             1681          (120) (a) "Telecommunications switching or routing equipment, machinery, or
             1682      software" means an item listed in Subsection (120)(b) if that item is purchased or leased
             1683      primarily for switching or routing:
             1684          (i) an ancillary service;
             1685          (ii) data communications;
             1686          (iii) voice communications; or
             1687          (iv) telecommunications service.
             1688          (b) The following apply to Subsection (120)(a):
             1689          (i) a bridge;
             1690          (ii) a computer;
             1691          (iii) a cross connect;
             1692          (iv) a modem;
             1693          (v) a multiplexer;
             1694          (vi) plug in circuitry;
             1695          (vii) a router;
             1696          (viii) software;
             1697          (ix) a switch; or
             1698          (x) equipment, machinery, or software that functions similarly to an item listed in
             1699      Subsections (120)(b)(i) through (ix) as determined by the commission by rule made in



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             1700
     accordance with Subsection (120)(c).
             1701          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1702      commission may by rule define what constitutes equipment, machinery, or software that
             1703      functions similarly to an item listed in Subsections (120)(b)(i) through (ix).
             1704          (121) (a) "Telecommunications transmission equipment, machinery, or software"
             1705      means an item listed in Subsection (121)(b) if that item is purchased or leased primarily for
             1706      sending, receiving, or transporting:
             1707          (i) an ancillary service;
             1708          (ii) data communications;
             1709          (iii) voice communications; or
             1710          (iv) telecommunications service.
             1711          (b) The following apply to Subsection (121)(a):
             1712          (i) an amplifier;
             1713          (ii) a cable;
             1714          (iii) a closure;
             1715          (iv) a conduit;
             1716          (v) a controller;
             1717          (vi) a duplexer;
             1718          (vii) a filter;
             1719          (viii) an input device;
             1720          (ix) an input/output device;
             1721          (x) an insulator;
             1722          (xi) microwave machinery or equipment;
             1723          (xii) an oscillator;
             1724          (xiii) an output device;
             1725          (xiv) a pedestal;
             1726          (xv) a power converter;
             1727          (xvi) a power supply;
             1728          (xvii) a radio channel;
             1729          (xviii) a radio receiver;
             1730          (xix) a radio transmitter;



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             1731
         (xx) a repeater;
             1732          (xxi) software;
             1733          (xxii) a terminal;
             1734          (xxiii) a timing unit;
             1735          (xxiv) a transformer;
             1736          (xxv) a wire; or
             1737          (xxvi) equipment, machinery, or software that functions similarly to an item listed in
             1738      Subsections (121)(b)(i) through (xxv) as determined by the commission by rule made in
             1739      accordance with Subsection (121)(c).
             1740          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1741      commission may by rule define what constitutes equipment, machinery, or software that
             1742      functions similarly to an item listed in Subsections (121)(b)(i) through (xxv).
             1743          (122) (a) "Textbook for a higher education course" means a textbook or other printed
             1744      material that is required for a course:
             1745          (i) offered by an institution of higher education; and
             1746          (ii) that the purchaser of the textbook or other printed material attends or will attend.
             1747          (b) "Textbook for a higher education course" includes a textbook in electronic format.
             1748          (123) "Tobacco" means:
             1749          (a) a cigarette;
             1750          (b) a cigar;
             1751          (c) chewing tobacco;
             1752          (d) pipe tobacco; or
             1753          (e) any other item that contains tobacco.
             1754          (124) "Unassisted amusement device" means an amusement device, skill device, or
             1755      ride device that is started and stopped by the purchaser or renter of the right to use or operate
             1756      the amusement device, skill device, or ride device.
             1757          (125) (a) "Use" means the exercise of any right or power over tangible personal
             1758      property, a product transferred electronically, or a service under Subsection 59-12-103 (1),
             1759      incident to the ownership or the leasing of that tangible personal property, product transferred
             1760      electronically, or service.
             1761          (b) "Use" does not include the sale, display, demonstration, or trial of tangible personal



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     property, a product transferred electronically, or a service in the regular course of business and
             1763      held for resale.
             1764          (126) "Value-added nonvoice data service" means a service:
             1765          (a) that otherwise meets the definition of a telecommunications service except that a
             1766      computer processing application is used to act primarily for a purpose other than conveyance,
             1767      routing, or transmission; and
             1768          (b) with respect to which a computer processing application is used to act on data or
             1769      information:
             1770          (i) code;
             1771          (ii) content;
             1772          (iii) form; or
             1773          (iv) protocol.
             1774          (127) (a) Subject to Subsection (127)(b), "vehicle" means the following that are
             1775      required to be titled, registered, or titled and registered:
             1776          (i) an aircraft as defined in Section 72-10-102 ;
             1777          (ii) a vehicle as defined in Section 41-1a-102 ;
             1778          (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
             1779          (iv) a vessel as defined in Section 41-1a-102 .
             1780          (b) For purposes of Subsection 59-12-104 (33) only, "vehicle" includes:
             1781          (i) a vehicle described in Subsection (127)(a); or
             1782          (ii) (A) a locomotive;
             1783          (B) a freight car;
             1784          (C) railroad work equipment; or
             1785          (D) other railroad rolling stock.
             1786          (128) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             1787      exchanging a vehicle as defined in Subsection (127).
             1788          (129) (a) "Vertical service" means an ancillary service that:
             1789          (i) is offered in connection with one or more telecommunications services; and
             1790          (ii) offers an advanced calling feature that allows a customer to:
             1791          (A) identify a caller; and
             1792          (B) manage multiple calls and call connections.



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             1793
         (b) "Vertical service" includes an ancillary service that allows a customer to manage a
             1794      conference bridging service.
             1795          (130) (a) "Voice mail service" means an ancillary service that enables a customer to
             1796      receive, send, or store a recorded message.
             1797          (b) "Voice mail service" does not include a vertical service that a customer is required
             1798      to have in order to utilize a voice mail service.
             1799          (131) (a) Except as provided in Subsection (131)(b), "waste energy facility" means a
             1800      facility that generates electricity:
             1801          (i) using as the primary source of energy waste materials that would be placed in a
             1802      landfill or refuse pit if it were not used to generate electricity, including:
             1803          (A) tires;
             1804          (B) waste coal; [or]
             1805          (C) oil shale; [and] or
             1806          (D) municipal solid waste; and
             1807          (ii) in amounts greater than actually required for the operation of the facility.
             1808          (b) "Waste energy facility" does not include a facility that incinerates:
             1809          [(i) municipal solid waste;]
             1810          [(ii)] (i) hospital waste as defined in 40 C.F.R. 60.51c; or
             1811          [(iii)] (ii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
             1812          (132) "Watercraft" means a vessel as defined in Section 73-18-2 .
             1813          (133) "Wind energy" means wind used as the sole source of energy to produce
             1814      electricity.
             1815          (134) "ZIP Code" means a Zoning Improvement Plan Code assigned to a geographic
             1816      location by the United States Postal Service.
             1817          Section 9. Section 59-12-104 is amended to read:
             1818           59-12-104. Exemptions.
             1819          The following sales and uses are exempt from the taxes imposed by this chapter:
             1820          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             1821      under Chapter 13, Motor and Special Fuel Tax Act;
             1822          (2) subject to Section 59-12-104.6 , sales to the state, its institutions, and its political
             1823      subdivisions; however, this exemption does not apply to sales of:



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             1824
         (a) construction materials except:
             1825          (i) construction materials purchased by or on behalf of institutions of the public
             1826      education system as defined in Utah Constitution Article X, Section 2, provided the
             1827      construction materials are clearly identified and segregated and installed or converted to real
             1828      property which is owned by institutions of the public education system; and
             1829          (ii) construction materials purchased by the state, its institutions, or its political
             1830      subdivisions which are installed or converted to real property by employees of the state, its
             1831      institutions, or its political subdivisions; or
             1832          (b) tangible personal property in connection with the construction, operation,
             1833      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             1834      providing additional project capacity, as defined in Section 11-13-103 ;
             1835          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             1836          (i) the proceeds of each sale do not exceed $1; and
             1837          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             1838      the cost of the item described in Subsection (3)(b) as goods consumed; and
             1839          (b) Subsection (3)(a) applies to:
             1840          (i) food and food ingredients; or
             1841          (ii) prepared food;
             1842          (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
             1843          (i) alcoholic beverages;
             1844          (ii) food and food ingredients; or
             1845          (iii) prepared food;
             1846          (b) sales of tangible personal property or a product transferred electronically:
             1847          (i) to a passenger;
             1848          (ii) by a commercial airline carrier; and
             1849          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
             1850          (c) services related to Subsection (4)(a) or (b);
             1851          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
             1852      and equipment:
             1853          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
             1854      North American Industry Classification System of the federal Executive Office of the



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             1855
     President, Office of Management and Budget; and
             1856          (II) for:
             1857          (Aa) installation in an aircraft, including services relating to the installation of parts or
             1858      equipment in the aircraft;
             1859          (Bb) renovation of an aircraft; or
             1860          (Cc) repair of an aircraft; or
             1861          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
             1862      commerce; or
             1863          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
             1864      aircraft operated by a common carrier in interstate or foreign commerce; and
             1865          (b) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             1866      a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
             1867      refund:
             1868          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
             1869          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
             1870          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
             1871      the sale prior to filing for the refund;
             1872          (iv) for sales and use taxes paid under this chapter on the sale;
             1873          (v) in accordance with Section 59-1-1410 ; and
             1874          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             1875      the person files for the refund on or before September 30, 2011;
             1876          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             1877      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             1878      exhibitor, distributor, or commercial television or radio broadcaster;
             1879          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             1880      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             1881      washing of tangible personal property;
             1882          (b) if a seller that sells at the same business location assisted cleaning or washing of
             1883      tangible personal property and cleaning or washing of tangible personal property that is not
             1884      assisted cleaning or washing of tangible personal property, the exemption described in
             1885      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning



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             1886
     or washing of the tangible personal property; and
             1887          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
             1888      Utah Administrative Rulemaking Act, the commission may make rules:
             1889          (i) governing the circumstances under which sales are at the same business location;
             1890      and
             1891          (ii) establishing the procedures and requirements for a seller to separately account for
             1892      sales of assisted cleaning or washing of tangible personal property;
             1893          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             1894      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             1895      fulfilled;
             1896          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             1897      this state if the vehicle is:
             1898          (a) not registered in this state; and
             1899          (b) (i) not used in this state; or
             1900          (ii) used in this state:
             1901          (A) if the vehicle is not used to conduct business, for a time period that does not
             1902      exceed the longer of:
             1903          (I) 30 days in any calendar year; or
             1904          (II) the time period necessary to transport the vehicle to the borders of this state; or
             1905          (B) if the vehicle is used to conduct business, for the time period necessary to transport
             1906      the vehicle to the borders of this state;
             1907          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             1908          (i) the item is intended for human use; and
             1909          (ii) (A) a prescription was issued for the item; or
             1910          (B) the item was purchased by a hospital or other medical facility; and
             1911          (b) (i) Subsection (10)(a) applies to:
             1912          (A) a drug;
             1913          (B) a syringe; or
             1914          (C) a stoma supply; and
             1915          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1916      commission may by rule define the terms:



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             1917
         (A) "syringe"; or
             1918          (B) "stoma supply";
             1919          (11) sales or use of property, materials, or services used in the construction of or
             1920      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             1921          (12) (a) sales of an item described in Subsection (12)(c) served by:
             1922          (i) the following if the item described in Subsection (12)(c) is not available to the
             1923      general public:
             1924          (A) a church; or
             1925          (B) a charitable institution;
             1926          (ii) an institution of higher education if:
             1927          (A) the item described in Subsection (12)(c) is not available to the general public; or
             1928          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             1929      offered by the institution of higher education; or
             1930          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             1931          (i) a medical facility; or
             1932          (ii) a nursing facility; and
             1933          (c) Subsections (12)(a) and (b) apply to:
             1934          (i) food and food ingredients;
             1935          (ii) prepared food; or
             1936          (iii) alcoholic beverages;
             1937          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             1938      or a product transferred electronically by a person:
             1939          (i) regardless of the number of transactions involving the sale of that tangible personal
             1940      property or product transferred electronically by that person; and
             1941          (ii) not regularly engaged in the business of selling that type of tangible personal
             1942      property or product transferred electronically;
             1943          (b) this Subsection (13) does not apply if:
             1944          (i) the sale is one of a series of sales of a character to indicate that the person is
             1945      regularly engaged in the business of selling that type of tangible personal property or product
             1946      transferred electronically;
             1947          (ii) the person holds that person out as regularly engaged in the business of selling that



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             1948
     type of tangible personal property or product transferred electronically;
             1949          (iii) the person sells an item of tangible personal property or product transferred
             1950      electronically that the person purchased as a sale that is exempt under Subsection (25); or
             1951          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             1952      this state in which case the tax is based upon:
             1953          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             1954      sold; or
             1955          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             1956      value of the vehicle or vessel being sold at the time of the sale as determined by the
             1957      commission; and
             1958          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1959      commission shall make rules establishing the circumstances under which:
             1960          (i) a person is regularly engaged in the business of selling a type of tangible personal
             1961      property or product transferred electronically;
             1962          (ii) a sale of tangible personal property or a product transferred electronically is one of
             1963      a series of sales of a character to indicate that a person is regularly engaged in the business of
             1964      selling that type of tangible personal property or product transferred electronically; or
             1965          (iii) a person holds that person out as regularly engaged in the business of selling a type
             1966      of tangible personal property or product transferred electronically;
             1967          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             1968      July 1, 2006, for a purchase or lease by a manufacturing facility except for a cogeneration
             1969      facility, of the following:
             1970          (i) machinery and equipment that:
             1971          (A) are used:
             1972          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             1973      recycler described in Subsection 59-12-102 [(55)](57)(b):
             1974          (Aa) in the manufacturing process;
             1975          (Bb) to manufacture an item sold as tangible personal property; and
             1976          (Cc) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             1977      (14)(a)(i)(A)(I) in the state; or
             1978          (II) for a manufacturing facility that is a scrap recycler described in Subsection



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             1979
     59-12-102 [(55)](57)(b):
             1980          (Aa) to process an item sold as tangible personal property; and
             1981          (Bb) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             1982      (14)(a)(i)(A)(II) in the state; and
             1983          (B) have an economic life of three or more years; and
             1984          (ii) normal operating repair or replacement parts that:
             1985          (A) have an economic life of three or more years; and
             1986          (B) are used:
             1987          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             1988      recycler described in Subsection 59-12-102 [(55)](57)(b):
             1989          (Aa) in the manufacturing process; and
             1990          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(I) in the
             1991      state; or
             1992          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             1993      59-12-102 [(55)](57)(b):
             1994          (Aa) to process an item sold as tangible personal property; and
             1995          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(II) in the
             1996      state;
             1997          (b) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             1998      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             1999      of the following:
             2000          (i) machinery and equipment that:
             2001          (A) are used:
             2002          (I) in the manufacturing process;
             2003          (II) to manufacture an item sold as tangible personal property; and
             2004          (III) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             2005      (14)(b) in the state; and
             2006          (B) have an economic life of three or more years; and
             2007          (ii) normal operating repair or replacement parts that:
             2008          (A) are used:
             2009          (I) in the manufacturing process; and



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             2010
         (II) in a manufacturing facility described in this Subsection (14)(b) in the state; and
             2011          (B) have an economic life of three or more years;
             2012          (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
             2013      by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
             2014      NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
             2015      Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
             2016      of the 2002 North American Industry Classification System of the federal Executive Office of
             2017      the President, Office of Management and Budget, of the following:
             2018          (i) machinery and equipment that:
             2019          (A) are used:
             2020          (I) (Aa) in the production process, other than the production of real property; or
             2021          (Bb) in research and development; and
             2022          (II) beginning on July 1, 2009, in an establishment described in this Subsection (14)(c)
             2023      in the state; and
             2024          (B) have an economic life of three or more years; and
             2025          (ii) normal operating repair or replacement parts that:
             2026          (A) have an economic life of three or more years; and
             2027          (B) are used in:
             2028          (I) (Aa) the production process, except for the production of real property; and
             2029          (Bb) an establishment described in this Subsection (14)(c) in the state; or
             2030          (II) (Aa) research and development; and
             2031          (Bb) in an establishment described in this Subsection (14)(c) in the state;
             2032          (d) (i) amounts paid or charged for a purchase or lease made on or after July 1, 2010,
             2033      but on or before June 30, 2014, by an establishment described in NAICS Code 518112, Web
             2034      Search Portals, of the 2002 North American Industry Classification System of the federal
             2035      Executive Office of the President, Office of Management and Budget, of the following:
             2036          (A) machinery and equipment that:
             2037          (I) are used in the operation of the web search portal;
             2038          (II) have an economic life of three or more years; and
             2039          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             2040      in the state; and



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             2041
         (B) normal operating repair or replacement parts that:
             2042          (I) are used in the operation of the web search portal;
             2043          (II) have an economic life of three or more years; and
             2044          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             2045      in the state; or
             2046          (ii) amounts paid or charged for a purchase or lease made on or after July 1, 2014, by
             2047      an establishment described in NAICS Code 518112, Web Search Portals, of the 2002 North
             2048      American Industry Classification System of the federal Executive Office of the President,
             2049      Office of Management and Budget, of the following:
             2050          (A) machinery and equipment that:
             2051          (I) are used in the operation of the web search portal; and
             2052          (II) have an economic life of three or more years; and
             2053          (B) normal operating repair or replacement parts that:
             2054          (I) are used in the operation of the web search portal; and
             2055          (II) have an economic life of three or more years;
             2056          (e) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
             2057      Utah Administrative Rulemaking Act, the commission:
             2058          (i) shall by rule define the term "establishment"; and
             2059          (ii) may by rule define what constitutes:
             2060          (A) processing an item sold as tangible personal property;
             2061          (B) the production process, except for the production of real property;
             2062          (C) research and development; or
             2063          (D) a new or expanding establishment described in Subsection (14)(d) in the state; and
             2064          (f) on or before October 1, 2011, and every five years after October 1, 2011, the
             2065      commission shall:
             2066          (i) review the exemptions described in this Subsection (14) and make
             2067      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             2068      exemptions should be continued, modified, or repealed; and
             2069          (ii) include in its report:
             2070          (A) an estimate of the cost of the exemptions;
             2071          (B) the purpose and effectiveness of the exemptions; and



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             2072
         (C) the benefits of the exemptions to the state;
             2073          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             2074          (i) tooling;
             2075          (ii) special tooling;
             2076          (iii) support equipment;
             2077          (iv) special test equipment; or
             2078          (v) parts used in the repairs or renovations of tooling or equipment described in
             2079      Subsections (15)(a)(i) through (iv); and
             2080          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             2081          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             2082      performance of any aerospace or electronics industry contract with the United States
             2083      government or any subcontract under that contract; and
             2084          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             2085      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             2086      by:
             2087          (A) a government identification tag placed on the tooling, equipment, or parts; or
             2088          (B) listing on a government-approved property record if placing a government
             2089      identification tag on the tooling, equipment, or parts is impractical;
             2090          (16) sales of newspapers or newspaper subscriptions;
             2091          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
             2092      product transferred electronically traded in as full or part payment of the purchase price, except
             2093      that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
             2094      trade-ins are limited to other vehicles only, and the tax is based upon:
             2095          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             2096      vehicle being traded in; or
             2097          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             2098      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             2099      commission; and
             2100          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             2101      following items of tangible personal property or products transferred electronically traded in as
             2102      full or part payment of the purchase price:



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             2103
         (i) money;
             2104          (ii) electricity;
             2105          (iii) water;
             2106          (iv) gas; or
             2107          (v) steam;
             2108          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             2109      or a product transferred electronically used or consumed primarily and directly in farming
             2110      operations, regardless of whether the tangible personal property or product transferred
             2111      electronically:
             2112          (A) becomes part of real estate; or
             2113          (B) is installed by a:
             2114          (I) farmer;
             2115          (II) contractor; or
             2116          (III) subcontractor; or
             2117          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
             2118      product transferred electronically if the tangible personal property or product transferred
             2119      electronically is exempt under Subsection (18)(a)(i); and
             2120          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following are
             2121      subject to the taxes imposed by this chapter:
             2122          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
             2123      incidental to farming:
             2124          (I) machinery;
             2125          (II) equipment;
             2126          (III) materials; or
             2127          (IV) supplies; and
             2128          (B) tangible personal property that is considered to be used in a manner that is
             2129      incidental to farming includes:
             2130          (I) hand tools; or
             2131          (II) maintenance and janitorial equipment and supplies;
             2132          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
             2133      transferred electronically if the tangible personal property or product transferred electronically



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             2134
     is used in an activity other than farming; and
             2135          (B) tangible personal property or a product transferred electronically that is considered
             2136      to be used in an activity other than farming includes:
             2137          (I) office equipment and supplies; or
             2138          (II) equipment and supplies used in:
             2139          (Aa) the sale or distribution of farm products;
             2140          (Bb) research; or
             2141          (Cc) transportation; or
             2142          (iii) a vehicle required to be registered by the laws of this state during the period
             2143      ending two years after the date of the vehicle's purchase;
             2144          (19) sales of hay;
             2145          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             2146      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             2147      garden, farm, or other agricultural produce is sold by:
             2148          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             2149      agricultural produce;
             2150          (b) an employee of the producer described in Subsection (20)(a); or
             2151          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             2152          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             2153      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             2154          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             2155      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             2156      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             2157      manufacturer, processor, wholesaler, or retailer;
             2158          (23) a product stored in the state for resale;
             2159          (24) (a) purchases of a product if:
             2160          (i) the product is:
             2161          (A) purchased outside of this state;
             2162          (B) brought into this state:
             2163          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             2164          (II) by a nonresident person who is not living or working in this state at the time of the



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             2165
     purchase;
             2166          (C) used for the personal use or enjoyment of the nonresident person described in
             2167      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             2168          (D) not used in conducting business in this state; and
             2169          (ii) for:
             2170          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
             2171      the product for a purpose for which the product is designed occurs outside of this state;
             2172          (B) a boat, the boat is registered outside of this state; or
             2173          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             2174      outside of this state;
             2175          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             2176          (i) a lease or rental of a product; or
             2177          (ii) a sale of a vehicle exempt under Subsection (33); and
             2178          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             2179      purposes of Subsection (24)(a), the commission may by rule define what constitutes the
             2180      following:
             2181          (i) conducting business in this state if that phrase has the same meaning in this
             2182      Subsection (24) as in Subsection (63);
             2183          (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
             2184      as in Subsection (63); or
             2185          (iii) a purpose for which a product is designed if that phrase has the same meaning in
             2186      this Subsection (24) as in Subsection (63);
             2187          (25) a product purchased for resale in this state, in the regular course of business, either
             2188      in its original form or as an ingredient or component part of a manufactured or compounded
             2189      product;
             2190          (26) a product upon which a sales or use tax was paid to some other state, or one of its
             2191      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             2192      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             2193      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             2194      Act;
             2195          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a



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             2196
     person for use in compounding a service taxable under the subsections;
             2197          (28) purchases made in accordance with the special supplemental nutrition program for
             2198      women, infants, and children established in 42 U.S.C. Sec. 1786;
             2199          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             2200      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             2201      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             2202      Manual of the federal Executive Office of the President, Office of Management and Budget;
             2203          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             2204      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
             2205          (a) not registered in this state; and
             2206          (b) (i) not used in this state; or
             2207          (ii) used in this state:
             2208          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
             2209      time period that does not exceed the longer of:
             2210          (I) 30 days in any calendar year; or
             2211          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             2212      the borders of this state; or
             2213          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             2214      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             2215      state;
             2216          (31) sales of aircraft manufactured in Utah;
             2217          (32) amounts paid for the purchase of telecommunications service for purposes of
             2218      providing telecommunications service;
             2219          (33) sales, leases, or uses of the following:
             2220          (a) a vehicle by an authorized carrier; or
             2221          (b) tangible personal property that is installed on a vehicle:
             2222          (i) sold or leased to or used by an authorized carrier; and
             2223          (ii) before the vehicle is placed in service for the first time;
             2224          (34) (a) 45% of the sales price of any new manufactured home; and
             2225          (b) 100% of the sales price of any used manufactured home;
             2226          (35) sales relating to schools and fundraising sales;



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             2227
         (36) sales or rentals of durable medical equipment if:
             2228          (a) a person presents a prescription for the durable medical equipment; and
             2229          (b) the durable medical equipment is used for home use only;
             2230          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             2231      Section 72-11-102 ; and
             2232          (b) the commission shall by rule determine the method for calculating sales exempt
             2233      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             2234          (38) sales to a ski resort of:
             2235          (a) snowmaking equipment;
             2236          (b) ski slope grooming equipment;
             2237          (c) passenger ropeways as defined in Section 72-11-102 ; or
             2238          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             2239      described in Subsections (38)(a) through (c);
             2240          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             2241          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             2242      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             2243      59-12-102 ;
             2244          (b) if a seller that sells or rents at the same business location the right to use or operate
             2245      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             2246      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             2247      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             2248      amusement, entertainment, or recreation for the assisted amusement devices; and
             2249          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
             2250      Utah Administrative Rulemaking Act, the commission may make rules:
             2251          (i) governing the circumstances under which sales are at the same business location;
             2252      and
             2253          (ii) establishing the procedures and requirements for a seller to separately account for
             2254      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
             2255      assisted amusement devices;
             2256          (41) (a) sales of photocopies by:
             2257          (i) a governmental entity; or



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             2258
         (ii) an entity within the state system of public education, including:
             2259          (A) a school; or
             2260          (B) the State Board of Education; or
             2261          (b) sales of publications by a governmental entity;
             2262          (42) amounts paid for admission to an athletic event at an institution of higher
             2263      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             2264      20 U.S.C. Sec. 1681 et seq.;
             2265          (43) (a) sales made to or by:
             2266          (i) an area agency on aging; or
             2267          (ii) a senior citizen center owned by a county, city, or town; or
             2268          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             2269          (44) sales or leases of semiconductor fabricating, processing, research, or development
             2270      materials regardless of whether the semiconductor fabricating, processing, research, or
             2271      development materials:
             2272          (a) actually come into contact with a semiconductor; or
             2273          (b) ultimately become incorporated into real property;
             2274          (45) an amount paid by or charged to a purchaser for accommodations and services
             2275      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             2276      59-12-104.2 ;
             2277          (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             2278      sports event registration certificate in accordance with Section 41-3-306 for the event period
             2279      specified on the temporary sports event registration certificate;
             2280          (47) (a) sales or uses of electricity, if the sales or uses are[: (a)] made under a tariff
             2281      adopted by the Public Service Commission of Utah only for purchase of electricity produced
             2282      from a new [wind, geothermal, biomass, or solar power] alternative energy source, as
             2283      designated in the tariff by the Public Service Commission of Utah; and
             2284          [(b) for an amount of electricity that is:]
             2285          [(i) unrelated to the amount of electricity used by the person purchasing the electricity
             2286      under the tariff described in Subsection (47)(a); and]
             2287          [(ii) equivalent to the number of kilowatthours specified in the tariff described in
             2288      Subsection (47)(a) that may be purchased under the tariff described in Subsection (47)(a);]



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             2289
         (b) the exemption under Subsection (47)(a) applies to the portion of the tariff rate a
             2290      customer pays under the tariff described in Subsection (47)(a) that exceeds the tariff rate under
             2291      the tariff described in Subsection (47)(a) that the customer would have paid absent the tariff;
             2292          (48) sales or rentals of mobility enhancing equipment if a person presents a
             2293      prescription for the mobility enhancing equipment;
             2294          (49) sales of water in a:
             2295          (a) pipe;
             2296          (b) conduit;
             2297          (c) ditch; or
             2298          (d) reservoir;
             2299          (50) sales of currency or coinage that constitute legal tender of the United States or of a
             2300      foreign nation;
             2301          (51) (a) sales of an item described in Subsection (51)(b) if the item:
             2302          (i) does not constitute legal tender of any nation; and
             2303          (ii) has a gold, silver, or platinum content of 80% or more; and
             2304          (b) Subsection (51)(a) applies to a gold, silver, or platinum:
             2305          (i) ingot;
             2306          (ii) bar;
             2307          (iii) medallion; or
             2308          (iv) decorative coin;
             2309          (52) amounts paid on a sale-leaseback transaction;
             2310          (53) sales of a prosthetic device:
             2311          (a) for use on or in a human; and
             2312          (b) (i) for which a prescription is required; or
             2313          (ii) if the prosthetic device is purchased by a hospital or other medical facility;
             2314          (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
             2315      machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
             2316      or equipment is primarily used in the production or postproduction of the following media for
             2317      commercial distribution:
             2318          (i) a motion picture;
             2319          (ii) a television program;



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             2320
         (iii) a movie made for television;
             2321          (iv) a music video;
             2322          (v) a commercial;
             2323          (vi) a documentary; or
             2324          (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
             2325      commission by administrative rule made in accordance with Subsection (54)(d); or
             2326          (b) notwithstanding Subsection (54)(a), purchases, leases, or rentals of machinery or
             2327      equipment by an establishment described in Subsection (54)(c) that is used for the production
             2328      or postproduction of the following are subject to the taxes imposed by this chapter:
             2329          (i) a live musical performance;
             2330          (ii) a live news program; or
             2331          (iii) a live sporting event;
             2332          (c) the following establishments listed in the 1997 North American Industry
             2333      Classification System of the federal Executive Office of the President, Office of Management
             2334      and Budget, apply to Subsections (54)(a) and (b):
             2335          (i) NAICS Code 512110; or
             2336          (ii) NAICS Code 51219; and
             2337          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2338      commission may by rule:
             2339          (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
             2340      or
             2341          (ii) define:
             2342          (A) "commercial distribution";
             2343          (B) "live musical performance";
             2344          (C) "live news program"; or
             2345          (D) "live sporting event";
             2346          (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             2347      on or before June 30, [2019] 2027, of [machinery or equipment] tangible personal property
             2348      that:
             2349          (i) is leased or purchased for or by a facility that:
             2350          (A) is [a renewable] an alternative energy electricity production facility;



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             2351
         (B) is located in the state; and
             2352          (C) (I) becomes operational on or after July 1, 2004; or
             2353          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             2354      2004, as a result of the use of the [machinery or equipment] tangible personal property;
             2355          (ii) has an economic life of five or more years; and
             2356          (iii) is used to make the facility or the increase in capacity of the facility described in
             2357      Subsection (55)(a)(i) operational up to the point of interconnection with an existing
             2358      transmission grid including:
             2359          (A) a wind turbine;
             2360          (B) generating equipment;
             2361          (C) a control and monitoring system;
             2362          (D) a power line;
             2363          (E) substation equipment;
             2364          (F) lighting;
             2365          (G) fencing;
             2366          (H) pipes; or
             2367          (I) other equipment used for locating a power line or pole; and
             2368          (b) this Subsection (55) does not apply to:
             2369          (i) [machinery or equipment] tangible personal property used in construction of:
             2370          (A) a new [renewable] alternative energy electricity production facility; or
             2371          (B) the increase in the capacity of [a renewable] an alternative energy electricity
             2372      production facility;
             2373          (ii) contracted services required for construction and routine maintenance activities;
             2374      and
             2375          (iii) unless the [machinery or equipment] tangible personal property is used or acquired
             2376      for an increase in capacity of the facility described in Subsection (55)(a)(i)(C)(II), [machinery
             2377      or equipment] tangible personal property used or acquired after:
             2378          (A) the [renewable] alternative energy electricity production facility described in
             2379      Subsection (55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
             2380          (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
             2381      in Subsection (55)(a)(iii);



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             2382
         (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             2383      on or before June 30, [2019] 2027, of [machinery or equipment] tangible personal property
             2384      that:
             2385          (i) is leased or purchased for or by a facility that:
             2386          (A) is a waste energy production facility;
             2387          (B) is located in the state; and
             2388          (C) (I) becomes operational on or after July 1, 2004; or
             2389          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             2390      2004, as a result of the use of the [machinery or equipment] tangible personal property;
             2391          (ii) has an economic life of five or more years; and
             2392          (iii) is used to make the facility or the increase in capacity of the facility described in
             2393      Subsection (56)(a)(i) operational up to the point of interconnection with an existing
             2394      transmission grid including:
             2395          (A) generating equipment;
             2396          (B) a control and monitoring system;
             2397          (C) a power line;
             2398          (D) substation equipment;
             2399          (E) lighting;
             2400          (F) fencing;
             2401          (G) pipes; or
             2402          (H) other equipment used for locating a power line or pole; and
             2403          (b) this Subsection (56) does not apply to:
             2404          (i) [machinery or equipment] tangible personal property used in construction of:
             2405          (A) a new waste energy facility; or
             2406          (B) the increase in the capacity of a waste energy facility;
             2407          (ii) contracted services required for construction and routine maintenance activities;
             2408      and
             2409          (iii) unless the [machinery or equipment] tangible personal property is used or acquired
             2410      for an increase in capacity described in Subsection (56)(a)(i)(C)(II), [machinery or equipment]
             2411      tangible personal property used or acquired after:
             2412          (A) the waste energy facility described in Subsection (56)(a)(i) is operational as



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             2413
     described in Subsection (56)(a)(iii); or
             2414          (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
             2415      in Subsection (56)(a)(iii);
             2416          (57) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             2417      or before June 30, [2019] 2027, of [machinery or equipment] tangible personal property that:
             2418          (i) is leased or purchased for or by a facility that:
             2419          (A) is located in the state;
             2420          (B) produces fuel from [biomass energy including:] alternative energy, including:
             2421          (I) methanol; or
             2422          (II) ethanol; and
             2423          (C) (I) becomes operational on or after July 1, 2004; or
             2424          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
             2425      a result of the installation of the [machinery or equipment] tangible personal property;
             2426          (ii) has an economic life of five or more years; and
             2427          (iii) is installed on the facility described in Subsection (57)(a)(i);
             2428          (b) this Subsection (57) does not apply to:
             2429          (i) [machinery or equipment] tangible personal property used in construction of:
             2430          (A) a new facility described in Subsection (57)(a)(i); or
             2431          (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
             2432          (ii) contracted services required for construction and routine maintenance activities;
             2433      and
             2434          (iii) unless the [machinery or equipment] tangible personal property is used or acquired
             2435      for an increase in capacity described in Subsection (57)(a)(i)(C)(II), [machinery or equipment]
             2436      tangible personal property used or acquired after:
             2437          (A) the facility described in Subsection (57)(a)(i) is operational; or
             2438          (B) the increased capacity described in Subsection (57)(a)(i) is operational;
             2439          (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
             2440      product transferred electronically to a person within this state if that tangible personal property
             2441      or product transferred electronically is subsequently shipped outside the state and incorporated
             2442      pursuant to contract into and becomes a part of real property located outside of this state;
             2443          (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other



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             2444
     state or political entity to which the tangible personal property is shipped imposes a sales, use,
             2445      gross receipts, or other similar transaction excise tax on the transaction against which the other
             2446      state or political entity allows a credit for sales and use taxes imposed by this chapter; and
             2447          (c) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             2448      a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
             2449      refund:
             2450          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
             2451          (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
             2452      which the sale is made;
             2453          (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
             2454      sale prior to filing for the refund;
             2455          (iv) for sales and use taxes paid under this chapter on the sale;
             2456          (v) in accordance with Section 59-1-1410 ; and
             2457          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             2458      the person files for the refund on or before June 30, 2011;
             2459          (59) purchases:
             2460          (a) of one or more of the following items in printed or electronic format:
             2461          (i) a list containing information that includes one or more:
             2462          (A) names; or
             2463          (B) addresses; or
             2464          (ii) a database containing information that includes one or more:
             2465          (A) names; or
             2466          (B) addresses; and
             2467          (b) used to send direct mail;
             2468          (60) redemptions or repurchases of a product by a person if that product was:
             2469          (a) delivered to a pawnbroker as part of a pawn transaction; and
             2470          (b) redeemed or repurchased within the time period established in a written agreement
             2471      between the person and the pawnbroker for redeeming or repurchasing the product;
             2472          (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
             2473          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
             2474      and



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             2475
         (ii) has a useful economic life of one or more years; and
             2476          (b) the following apply to Subsection (61)(a):
             2477          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             2478          (ii) telecommunications equipment, machinery, or software required for 911 service;
             2479          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             2480          (iv) telecommunications switching or routing equipment, machinery, or software; or
             2481          (v) telecommunications transmission equipment, machinery, or software;
             2482          (62) (a) beginning on July 1, 2006, and ending on June 30, [2016] 2027, purchases of
             2483      tangible personal property or a product transferred electronically that are used in the research
             2484      and development of [coal-to-liquids, oil shale, or tar sands] alternative energy technology; and
             2485          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2486      commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
             2487      purchases of tangible personal property or a product transferred electronically that are used in
             2488      the research and development of [coal-to-liquids, oil shale, and tar sands] alternative energy
             2489      technology;
             2490          (63) (a) purchases of tangible personal property or a product transferred electronically
             2491      if:
             2492          (i) the tangible personal property or product transferred electronically is:
             2493          (A) purchased outside of this state;
             2494          (B) brought into this state at any time after the purchase described in Subsection
             2495      (63)(a)(i)(A); and
             2496          (C) used in conducting business in this state; and
             2497          (ii) for:
             2498          (A) tangible personal property or a product transferred electronically other than the
             2499      tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
             2500      for a purpose for which the property is designed occurs outside of this state; or
             2501          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             2502      outside of this state;
             2503          (b) the exemption provided for in Subsection (63)(a) does not apply to:
             2504          (i) a lease or rental of tangible personal property or a product transferred electronically;
             2505      or



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             2506
         (ii) a sale of a vehicle exempt under Subsection (33); and
             2507          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             2508      purposes of Subsection (63)(a), the commission may by rule define what constitutes the
             2509      following:
             2510          (i) conducting business in this state if that phrase has the same meaning in this
             2511      Subsection (63) as in Subsection (24);
             2512          (ii) the first use of tangible personal property or a product transferred electronically if
             2513      that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
             2514          (iii) a purpose for which tangible personal property or a product transferred
             2515      electronically is designed if that phrase has the same meaning in this Subsection (63) as in
             2516      Subsection (24);
             2517          (64) sales of disposable home medical equipment or supplies if:
             2518          (a) a person presents a prescription for the disposable home medical equipment or
             2519      supplies;
             2520          (b) the disposable home medical equipment or supplies are used exclusively by the
             2521      person to whom the prescription described in Subsection (64)(a) is issued; and
             2522          (c) the disposable home medical equipment and supplies are listed as eligible for
             2523      payment under:
             2524          (i) Title XVIII, federal Social Security Act; or
             2525          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             2526          (65) sales:
             2527          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
             2528      District Act; or
             2529          (b) of tangible personal property to a subcontractor of a public transit district, if the
             2530      tangible personal property is:
             2531          (i) clearly identified; and
             2532          (ii) installed or converted to real property owned by the public transit district;
             2533          (66) sales of construction materials:
             2534          (a) purchased on or after July 1, 2010;
             2535          (b) purchased by, on behalf of, or for the benefit of an international airport:
             2536          (i) located within a county of the first class; and



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             2537
         (ii) that has a United States customs office on its premises; and
             2538          (c) if the construction materials are:
             2539          (i) clearly identified;
             2540          (ii) segregated; and
             2541          (iii) installed or converted to real property:
             2542          (A) owned or operated by the international airport described in Subsection (66)(b); and
             2543          (B) located at the international airport described in Subsection (66)(b);
             2544          (67) sales of construction materials:
             2545          (a) purchased on or after July 1, 2008;
             2546          (b) purchased by, on behalf of, or for the benefit of a new airport:
             2547          (i) located within a county of the second class; and
             2548          (ii) that is owned or operated by a city in which an airline as defined in Section
             2549      59-2-102 is headquartered; and
             2550          (c) if the construction materials are:
             2551          (i) clearly identified;
             2552          (ii) segregated; and
             2553          (iii) installed or converted to real property:
             2554          (A) owned or operated by the new airport described in Subsection (67)(b);
             2555          (B) located at the new airport described in Subsection (67)(b); and
             2556          (C) as part of the construction of the new airport described in Subsection (67)(b);
             2557          (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
             2558          (69) purchases and sales described in Section 63H-4-111 ;
             2559          (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
             2560      overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
             2561      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             2562      lists a state or country other than this state as the location of registry of the fixed wing turbine
             2563      powered aircraft; or
             2564          (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
             2565      provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
             2566      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             2567      lists a state or country other than this state as the location of registry of the fixed wing turbine



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             2568
     powered aircraft;
             2569          (71) subject to Section 59-12-104.4 , sales of a textbook for a higher education course:
             2570          (a) to a person admitted to an institution of higher education; and
             2571          (b) by a seller, other than a bookstore owned by an institution of higher education, if
             2572      51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
             2573      textbook for a higher education course; and
             2574          (72) a license fee or tax a municipality imposes in accordance with Subsection
             2575      10-1-203 (5) on a purchaser from a business for which the municipality provides an enhanced
             2576      level of municipal services.
             2577          Section 10. Section 63M-1-3101 is enacted to read:
             2578     
Part 31. Alternative Energy Manufacturing Tax Credit Act

             2579          63M-1-3101. Title.
             2580          This part is known as the "Alternative Energy Manufacturing Tax Credit Act."
             2581          Section 11. Section 63M-1-3102 is enacted to read:
             2582          63M-1-3102. Definitions.
             2583          As used in this section:
             2584          (1) "Alternative energy" is as defined in Section 59-12-102 .
             2585          (2) (a) "Alternative energy entity" means a person that:
             2586          (i) conducts business within the state; and
             2587          (ii) enters into an agreement with the office that qualifies the person to receive a tax
             2588      credit.
             2589          (b) "Alternative energy entity" includes a pass-through entity taxpayer, as defined in
             2590      Section 59-10-1402 , of a person described in Subsection (2)(a).
             2591          (3) "Alternative energy manufacturing project" means a project produced by an
             2592      alternative energy entity if that project involves:
             2593          (a) a new or expanding operation in the state of a new or expanding alternative energy
             2594      entity; and
             2595          (b) the manufacturing of machinery or equipment used directly in the production of
             2596      alternative energy.
             2597          (4) "New incremental job within the state" means, with respect to an alternative energy
             2598      entity, an employment position that:



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Senate 3rd Reading Amendments 2-29-2012 cm/rlr
             2599
         (a) did not exist within the state before:
             2600          (i) the alternative energy entity entered into an agreement with the office in accordance
             2601      with Section 63M-1-3103 ; and
             2602          (ii) the alternative energy manufacturing project began;
             2603          (b) is not shifted from one location in the state to another location in the state; and
             2604          (c) is established to the satisfaction of the office, including by amounts paid or
             2605      withheld by the alternative energy entity under Title 59, Chapter 10, Individual Income Tax
             2606      Act.
             2607          (5) "New state revenues" means an increased amount of tax revenues generated as a
             2608      result of an alternative energy manufacturing project by an alternative energy entity or a new
             2609      incremental job within the state under the following:
             2610          (a) Title 59, Chapter 7, Corporate Franchise and Income Taxes;
             2611          (b) Title 59, Chapter 10, Individual Income Tax Act; and
             2612          (c) Title 59, Chapter 12, Sales and Use Tax Act.
             2613          (6) "Office" means the Governor's Office of Economic Development.
             2614          (7) "Tax credit" means a tax credit under Section 59-7-614.8 or 59-10-1030 .
             2615          (8) "Tax credit applicant" means an alternative energy entity that applies to the office
             2616      to receive a tax credit certificate under this part.
             2617          (9) "Tax credit certificate" means a certificate issued by the office that:
             2618          (a) lists the name of the tax credit certificate recipient;
             2619          (b) lists S. the .S tax credit certificate recipient's taxpayer identification number;
             2620          (c) lists the amount of the tax credit certificate recipient's tax credits authorized under
             2621      this part for a taxable year; and
             2622          (d) includes other information as determined by the office.
             2623          (10) "Tax credit certificate recipient" means an alternative energy entity that receives a
             2624      tax credit certificate for a tax credit in accordance with this part.
             2625          Section 12. Section 63M-1-3103 is enacted to read:
             2626          63M-1-3103. Tax credits.
             2627          (1) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             2628      the office, with advice from the board, shall make rules establishing standards an alternative
             2629      energy entity shall meet to qualify for a tax credit.



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             2630
         (b) Before the office enters into an agreement described in Subsection (2) with an
             2631      alternative energy entity, the office shall certify:
             2632          (i) that the alternative energy manufacturing project will generate new state revenues;
             2633          (ii) the economic life of the alternative energy manufacturing project produced by the
             2634      alternative energy entity;
             2635          (iii) that local incentives have been committed or will be committed to be provided to
             2636      the alternative energy manufacturing project;
             2637          (iv) that the alternative energy entity meets the requirements of Section 63M-1-3104 ;
             2638      and
             2639          (v) that the alternative energy entity has received a Certificate of Good Standing from
             2640      the Division of Corporations and Commercial Code.
             2641          (2) If an alternative energy entity meets the requirements of this part to receive a tax
             2642      credit, the office may enter into an agreement with the alternative energy entity to authorize the
             2643      tax credit in accordance with Subsection (3).
             2644          (3) (a) Subject to Subsections (3)(b) through (d), the office may authorize or commit a
             2645      tax credit under this part that may not exceed 100% of new state revenues generated by the
             2646      alternative energy manufacturing project.
             2647          (b) As determined by the office, the office may authorize or commit a tax credit under
             2648      this section for a time period that does not exceed the lesser of:
             2649          (i) the economic life of the alternative energy manufacturing project; or
             2650          (ii) 20 years.
             2651          (c) The office shall consider economic modeling, including the costs and benefits of an
             2652      alternative energy manufacturing project to the state and local governments, in determining:
             2653          (i) the amount of tax credit to authorize or commit in accordance with Subsection
             2654      (3)(a); and
             2655          (ii) the time period for which the office will authorize or commit a tax credit in
             2656      accordance with Subsection (3)(b).
             2657          (d) For a taxable year, a tax credit under this section may not exceed the new state
             2658      revenues generated by an alternative energy manufacturing project during that taxable year.
             2659          (4) An alternative energy entity that seeks to receive a tax credit or has entered into an
             2660      agreement described in Subsection (2) with the office shall:



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             2661
         (a) annually file a report with the office showing the new state revenues generated by
             2662      the alternative energy manufacturing project during the taxable year for which the alternative
             2663      energy entity seeks to receive a tax credit under Section 59-7-614.8 or 59-10-1030 ;
             2664          (b) submit to an audit for verification of a tax credit under Section 59-7-614.8 or
             2665      59-10-1030 ;
             2666          (c) provide the office with information required by the office to certify the economic
             2667      life of the alternative energy manufacturing project produced by the alternative energy entity,
             2668      which may include a power purchase agreement, a lease, or a permit; and
             2669          (d) retain records supporting a claim for a tax credit for at least four years after the
             2670      alternative energy entity claims a tax credit under 59-7-614.8 or 59-10-1030 .
             2671          (5) The office shall annually certify the new state revenues generated by an alternative
             2672      energy manufacturing project for a taxable year for which an alternative energy entity seeks to
             2673      receive a tax credit under Section 59-7-614.8 or 59-10-1030 .
             2674          Section 13. Section 63M-1-3104 is enacted to read:
             2675          63M-1-3104. Qualifications for tax credit -- Procedure.
             2676          (1) The office, with advice from the board, shall certify an alternative energy entity's
             2677      eligibility for a tax credit as provided in this section.
             2678          (2) A tax credit applicant shall provide the office with:
             2679          (a) an application for a tax credit certificate;
             2680          (b) documentation that the tax credit applicant meets the standards and requirements
             2681      described in Section 63M-1-3103 to the satisfaction of the office for the taxable year for which
             2682      the tax credit applicant seeks to claim a tax credit; and
             2683          (c) documentation that expressly directs and authorizes the State Tax Commission to
             2684      disclose to the office the tax credit applicant's returns and other information concerning the tax
             2685      credit applicant that would otherwise be subject to confidentiality under Section 59-1-403 or
             2686      Section 6103, Internal Revenue Code.
             2687          (3) (a) The office shall submit the documentation described in Subsection (2)(c) to the
             2688      State Tax Commission.
             2689          (b) Upon receipt of the documentation described in Subsection (2)(c), the State Tax
             2690      Commission shall provide the office with the documentation described in Subsection (2)(c)
             2691      requested by the office that the tax credit applicant directed and authorized the State Tax



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             2692
     Commission to provide to the office.
             2693          (4) If, after the office reviews the documentation described in Subsections (2) and (3),
             2694      the office determines that the documentation supporting the tax credit applicant's claim for a
             2695      tax credit is not substantially accurate, the office shall:
             2696          (a) deny the tax credit; or
             2697          (b) inform the tax credit applicant that the documentation supporting the tax credit
             2698      applicant's claim for a tax credit was inadequate and ask the tax credit applicant to submit new
             2699      documentation.
             2700          (5) If, after the office reviews the documentation described in Subsections (2) and (3),
             2701      the office determines that the documentation supporting the tax credit applicant's claim for a
             2702      tax credit is substantially accurate, the office shall, on the basis of that documentation:
             2703          (a) enter into the agreement described in Section 63M-1-3103 ;
             2704          (b) issue a tax credit certificate to the tax credit applicant; and
             2705          (c) provide a duplicate copy of the tax credit certificate described in Subsection (5)(b)
             2706      to the State Tax Commission.
             2707          (6) An alternative energy entity may not claim a tax credit under this part unless the
             2708      alternative energy entity is a tax credit certificate recipient.
             2709          (7) A tax credit certificate recipient that claims a tax credit shall retain the tax credit
             2710      certificate in accordance with Subsection 63M-1-3103 (4).
             2711          Section 14. Section 63M-1-3105 is enacted to read:
             2712          63M-1-3105. Report to the Legislature.
             2713          The office shall report annually to the Workforce Services and Community and
             2714      Economic Development Interim Committee and the Revenue and Taxation Interim Committee
             2715      describing:
             2716          (1) its success in attracting alternative energy manufacturing projects to the state and
             2717      the resulting increase in new state revenues under this part;
             2718          (2) the amount of tax credits the office has granted or will grant and the time period
             2719      during which the tax credits have been or will be granted; and
             2720          (3) the economic impact on the state by comparing new state revenues to tax credits
             2721      that have been or will be granted under this part.
             2722          Section 15. Section 63M-4-401 is amended to read:



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             2723
          63M-4-401. Creation of Office of Energy Development -- Director -- Purpose --
             2724      Rulemaking regarding confidential information.
             2725          (1) As used in this section, "office" means the Office of Energy Development created
             2726      in Subsection (2).
             2727          (2) There is created an Office of Energy Development.
             2728          (3) (a) The governor's energy advisor shall appoint a director of the office.
             2729          (b) The director shall report to the governor's energy advisor and may appoint staff as
             2730      funding within existing budgets allows.
             2731          (c) The office may consolidate energy staff and functions existing in the State Energy
             2732      Program.
             2733          (4) The purpose of the office is to implement:
             2734          (a) the state energy policy under Section 63M-4-301 ; and
             2735          (b) the governor's energy goals and objectives.
             2736          (5) By following the procedures and requirements of Title 63J, Chapter 5, Federal
             2737      Funds Procedures Act, the office may:
             2738          (a) seek federal grants or loans;
             2739          (b) seek to participate in federal programs; and
             2740          (c) in accordance with applicable federal program guidelines, administer federally
             2741      funded state energy programs.
             2742          (6) The office shall perform the duties required by Sections 59-7-614.7 and 59-10-1029
             2743      and Part 5, Alternative Energy Development Tax Credit Act.
             2744          [(6)] (7) (a) For purposes of administering this section, the office may make rules, by
             2745      following the procedures and requirements of Title 63G, Chapter 3, Utah Administrative
             2746      Rulemaking Act, to maintain as confidential, and not as a public record, information that the
             2747      office receives from any source.
             2748          (b) The office shall maintain information the office receives from any source at the
             2749      level of confidentiality assigned by the source.
             2750          Section 16. Section 63M-4-501 is enacted to read:
             2751     
Part 5. Alternative Energy Development Tax Credit Act

             2752          63M-4-501. Title.
             2753          This part is known as the "Alternative Energy Development Tax Credit Act."



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             2754
         Section 17. Section 63M-4-502 is enacted to read:
             2755          63M-4-502. Definitions.
             2756          As used in this part:
             2757          (1) "Alternative energy" is as defined in Section 59-12-102 .
             2758          (2) (a) "Alternative energy entity" means a person that:
             2759          (i) conducts business within the state; and
             2760          (ii) enters into an agreement with the office that qualifies the person to receive a tax
             2761      credit.
             2762          (b) "Alternative energy entity" includes a pass-through entity taxpayer, as defined in
             2763      Section 59-10-1402 , of a person described in Subsection (2)(a).
             2764          (3) "Alternative energy project" means a project produced by an alternative energy
             2765      entity if that project involves:
             2766          (a) a new or expanding operation in the state; and
             2767          (b) (i) utility-scale alternative energy generation; or
             2768          (ii) the extraction of alternative fuels.
             2769          (4) "New incremental job within the state" means, with respect to an alternative energy
             2770      entity, an employment position that:
             2771          (a) did not exist within the state before:
             2772          (i) the alternative energy entity entered into an agreement with the office in accordance
             2773      with Section 63M-4-503 ; and
             2774          (ii) the alternative energy project began;
             2775          (b) is not shifted from one location in the state to another location in the state; and
             2776          (c) is established to the satisfaction of the office, including by amounts paid or
             2777      withheld by the alternative energy entity under Title 59, Chapter 10, Individual Income Tax
             2778      Act.
             2779          (5) "New state revenues" means an increased amount of tax revenues generated as a
             2780      result of an alternative energy project by an alternative energy entity or a new incremental job
             2781      within the state under the following:
             2782          (a) Title 59, Chapter 7, Corporate Franchise and Income Taxes;
             2783          (b) Title 59, Chapter 10, Individual Income Tax Act; and
             2784          (c) Title 59, Chapter 12, Sales and Use Tax Act.



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             2785
         (6) "Office" is as defined in Section 63M-4-401 .
             2786          (7) "Tax credit" means a tax credit under Section 59-7-614.7 or 59-10-1029 .
             2787          (8) "Tax credit applicant" means an alternative energy entity that applies to the office
             2788      to receive a tax credit certificate under this part.
             2789          (9) "Tax credit certificate" means a certificate issued by the office that:
             2790          (a) lists the name of the tax credit certificate recipient;
             2791          (b) lists the tax credit certificate recipient's taxpayer identification number;
             2792          (c) lists the amount of the tax credit certificate recipient's tax credits authorized under
             2793      this part for a taxable year; and
             2794          (d) includes other information as determined by the office.
             2795          (10) "Tax credit certificate recipient" means an alternative energy entity that receives a
             2796      tax credit certificate for a tax credit in accordance with this part.
             2797          Section 18. Section 63M-4-503 is enacted to read:
             2798          63M-4-503. Tax credits.
             2799          (1) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             2800      the office shall make rules establishing standards an alternative energy entity shall meet to
             2801      qualify for a tax credit.
             2802          (b) Before the office enters into an agreement described in Subsection (2) with an
             2803      alternative energy entity, the office, in consultation with other state agencies as necessary, shall
             2804      certify:
             2805          (i) that the alternative energy entity plans to produce in the state at least:
             2806          (A) two megawatts of electricity; or
             2807          (B) 1,000 barrels per day if the alternative energy project is a crude oil equivalent
             2808      production;
             2809          (ii) that the alternative energy project will generate new state revenues;
             2810          (iii) the economic life of the alternative energy project produced by the alternative
             2811      energy entity;
             2812          (iv) that the alternative energy entity meets the requirements of Section 63M-4-504 ;
             2813      and
             2814          (v) that the alternative energy entity has received a Certificate of Good Standing from
             2815      the Division of Corporations and Commercial Code.



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Senate 3rd Reading Amendments 2-29-2012 cm/rlr
             2816
         (2) If an alternative energy entity meets the requirements of this part to receive a tax
             2817      credit, the office shall enter into an agreement with the alternative energy entity to authorize the
             2818      tax credit in accordance with Subsection (3).
             2819          (3) (a) Subject to Subsection (3) H. [ (c) ] (b) .H , if the office expects that the time
             2819a      from the
             2820      commencement of construction until the end of the economic life of the alternative energy
             2821      project is H. [ less than 50 years ] 20 years or more .H :
             2822          (i) the office shall grant a tax credit for the lesser of:
             2823          (A) the economic life of the alternative energy project; or
             2824          (B) 20 years; and
             2825          (ii) the tax credit is equal to 75% of new state revenues generated by the alternative
             2826      energy project.
             2827           H. [ (b) Subject to Subsection (3)(c), if the office expects that the time from the
             2828      commencement of construction until the end of the economic life of the alternative energy
             2829      project is 50 years or more:
             2830          (i) the office shall grant a tax credit for the lesser of:
             2831          (A) the economic life of the alternative energy project; or
             2832          (B) S. [30] 25 .S years; and
             2833          (ii) the tax credit is equal to 75% of new state revenues generated by the alternative
             2834      energy project.
]

             2835           [ (c) ] (b) .H For a taxable year, a tax credit under this section may not exceed the new state
             2836      revenues generated by an alternative energy project during that taxable year.
             2837          (4) An alternative energy entity that seeks to receive a tax credit or has entered into an
             2838      agreement described in Subsection (2) with the office shall:
             2839          (a) annually file a report with the office showing the new state revenues generated by
             2840      the alternative energy project during the taxable year for which the alternative energy entity
             2841      seeks to receive a tax credit under Section S. [ 59-7-614.6 ] 59-7-614.7 .S or 59-10-1029 ;
             2842          (b) subject to Subsection (5), annually file a report with the office prepared by an
             2843      independent certified public accountant verifying the new state revenue described in
             2844      Subsection (4)(a);
             2845          (c) subject to Subsection (5), file a report with the office at least every four years
             2846      prepared by an independent auditor auditing the new state revenue described in Subsection



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             2847
     (4)(a);
             2848          (d) provide the office with information required by the office to certify the economic
             2849      life of the alternative energy project produced by the alternative energy entity, which may
             2850      include a power purchase agreement, a lease, or a permit; and
             2851          (e) retain records supporting a claim for a tax credit for at least four years after the
             2852      alternative energy entity claims a tax credit under Section 59-7-614.7 or 59-10-1029 .
             2853          (5) An alternative energy entity for which a report is prepared under Subsection (4)(b)
             2854      or (c) shall pay the costs of preparing the report.
             2855          (6) The office shall annually certify the new state revenues generated by an alternative
             2856      energy project for a taxable year for which an alternative energy entity seeks to receive a tax
             2857      credit under Section 59-7-614.7 or 59-10-1029 .
             2858          Section 19. Section 63M-4-504 is enacted to read:
             2859          63M-4-504. Qualifications for tax credit -- Procedure.
             2860          (1) The office shall certify an alternative energy entity's eligibility for a tax credit as
             2861      provided in this section.
             2862          (2) A tax credit applicant shall provide the office with:
             2863          (a) an application for a tax credit certificate;
             2864          (b) documentation that the tax credit applicant meets the standards and requirements
             2865      described in Section 63M-4-503 to the satisfaction of the office for the taxable year for which
             2866      the tax credit applicant seeks to claim a tax credit; and
             2867          (c) documentation that expressly directs and authorizes the State Tax Commission to
             2868      disclose to the office the tax credit applicant's returns and other information concerning the tax
             2869      credit applicant that would otherwise be subject to confidentiality under Section 59-1-403 or
             2870      Section 6103, Internal Revenue Code.
             2871          (3) (a) The office shall submit the documentation described in Subsection (2)(c) to the
             2872      State Tax Commission.
             2873          (b) Upon receipt of the documentation described in Subsection (2)(c), the State Tax
             2874      Commission shall provide the office with the documentation described in Subsection (2)(c)
             2875      requested by the office that the tax credit applicant directed and authorized the State Tax
             2876      Commission to provide to the office.
             2877          (4) If, after the office reviews the documentation described in Subsections (2) and (3),



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             2878
     the office determines that the documentation supporting the tax credit applicant's claim for a
             2879      tax credit is not substantially accurate, the office shall:
             2880          (a) deny the tax credit; or
             2881          (b) inform the tax credit applicant that the documentation supporting the tax credit
             2882      applicant's claim for a tax credit was inadequate and ask the tax credit applicant to submit new
             2883      documentation.
             2884          (5) If, after the office reviews the documentation described in Subsections (2) and (3),
             2885      the office determines that the documentation supporting the tax credit applicant's claim for a
             2886      tax credit is substantially accurate, the office shall, on the basis of that documentation:
             2887          (a) enter into the agreement described in Section 63M-4-503 ;
             2888          (b) issue a tax credit certificate to the tax credit applicant; and
             2889          (c) provide a duplicate copy of the tax credit certificate described in Subsection (5)(b)
             2890      to the State Tax Commission.
             2891          (6) An alternative energy entity may not claim a tax credit under this part unless the
             2892      alternative energy entity is a tax credit certificate recipient.
             2893          (7) A tax credit certificate recipient that claims a tax credit shall retain the tax credit
             2894      certificate in accordance with Subsection 63M-4-503 (4).
             2895          Section 20. Section 63M-4-505 is enacted to read:
             2896          63M-4-505. Report to the Legislature.
             2897          The office shall report annually to the Public Utilities and Technology Interim
             2898      Committee and the Revenue and Taxation Interim Committee describing:
             2899          (1) its success in attracting alternative energy projects to the state and the resulting
             2900      increase in new state revenues under this part;
             2901          (2) the amount of tax credits the office has granted or will grant and the time period
             2902      during which the tax credits have been or will be granted; and
             2903          (3) the economic impact on the state by comparing new state revenues to tax credits
             2904      that have been or will be granted under this part.
             2905          Section 21. Repealer.
             2906          This bill repeals:
             2907          Section 63M-1-2801, Title.
             2908          Section 63M-1-2802, Findings.



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             2909
         Section 63M-1-2803, Definitions.
             2910          Section 63M-1-2804, Creation of alternative energy development zones -- Tax
             2911      credits.
             2912          Section 63M-1-2805, Qualifications for tax credit -- Procedure.
             2913          Section 63M-1-2806, Report to the Legislature.
             2914          Section 22. Effective date -- Retrospective operation.
             2915          (1) Except as provided in Subsection (2) or (3), this bill takes effect on May 8, 2012.
             2916          (2) The amendments to or enactments of the following sections have retrospective
             2917      operation for a taxable year beginning on or after January 1, 2012:
             2918          (a) Section 59-7-614.2 ;
             2919          (b) Section 59-7-614.7 ;
             2920          (c) Section 59-7-614.8 ;
             2921          (d) Section 59-10-1029 ;
             2922          (e) Section 59-10-1030 ; and
             2923          (f) Section 59-10-1107 .
             2924          (3) The amendments to the following sections take effect on July 1, 2012:
             2925          (a) Section 10-1-304 ;
             2926          (b) Section 59-12-102 ; and
             2927          (c) Section 59-12-104 .


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