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S.B. 190

             1     

RESEARCH AND DEVELOPMENT AMENDMENTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: John L. Valentine

             5     
House Sponsor: John Dougall

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill makes changes related to research and development.
             10      Highlighted Provisions:
             11          This bill:
             12          .    modifies income tax credits related to research;
             13          .    defines terms;
             14          .    enacts a sales and use tax exemption for certain construction materials used in a life
             15      science research and development facility;
             16          .    enacts a sales and use tax exemption for certain machinery and equipment used for
             17      research purposes and repair and replacement parts for that machinery and
             18      equipment; and
             19          .    makes technical and conforming changes.
             20      Money Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          This bill provides an effective date.
             24          This bill provides for retrospective operation.
             25      Utah Code Sections Affected:
             26      AMENDS:
             27          59-7-612, as last amended by Laws of Utah 2011, Chapter 384


             28          59-10-1012, as last amended by Laws of Utah 2011, Chapter 384
             29          59-12-102, as last amended by Laws of Utah 2011, Chapters 14, 285, and 314
             30          59-12-104, as last amended by Laws of Utah 2011, Chapters 288, 314, 370, and 391
             31     
             32      Be it enacted by the Legislature of the state of Utah:
             33          Section 1. Section 59-7-612 is amended to read:
             34           59-7-612. Tax credits for research activities conducted in the state -- Carry
             35      forward -- Commission to report modification or repeal of certain federal provisions --
             36      Revenue and Taxation Interim Committee study.
             37          (1) (a) A taxpayer meeting the requirements of this section may claim the following
             38      nonrefundable tax credits:
             39          (i) a research tax credit of 5% of the taxpayer's qualified research expenses for the
             40      current taxable year that exceed the base amount provided for under Subsection (4);
             41          (ii) a tax credit for a payment to a qualified organization for basic research as provided
             42      in Section 41(e), Internal Revenue Code, of 5% for the current taxable year that exceed the
             43      base amount provided for under Subsection (4); and
             44          (iii) a tax credit equal to[: (A) for the taxable year beginning on or after January 1,
             45      2008, but beginning on or before December 31, 2008, 5% of the taxpayer's qualified research
             46      expenses for the current taxable year; (B) for the taxable year beginning on or after January 1,
             47      2009, but beginning on or before December 31, 2009, 6.3% of the taxpayer's qualified research
             48      expenses for the current taxable year; or (C) for taxable years beginning on or after January 1,
             49      2010, 9.2%] 7.5% of the taxpayer's qualified research expenses for the current taxable year.
             50          (b) Subject to Subsection (5), a taxpayer may claim a tax credit under:
             51          (i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the taxpayer incurs
             52      the qualified research expenses; or
             53          (ii) Subsection (1)(a)(ii), for the taxable year for which the taxpayer makes the payment
             54      to the qualified organization.
             55          (c) The tax credits provided for in this section do not include the alternative
             56      incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
             57          (2) For purposes of claiming a tax credit under this section, a unitary group as defined
             58      in Section 59-7-101 is considered to be one taxpayer.


             59          (3) Except as specifically provided for in this section:
             60          (a) the tax credits authorized under Subsection (1) shall be calculated as provided in
             61      Section 41, Internal Revenue Code; and
             62          (b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
             63      the tax credits authorized under Subsection (1).
             64          (4) For purposes of this section:
             65          (a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
             66      Internal Revenue Code, except that:
             67          (i) the base amount does not include the calculation of the alternative incremental
             68      credit provided for in Section 41(c)(4), Internal Revenue Code;
             69          (ii) a taxpayer's gross receipts include only those gross receipts attributable to sources
             70      within this state as provided in Part 3, Allocation and Apportionment of Income - Utah
             71      UDITPA Provisions; and
             72          (iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
             73      the base amount, a taxpayer:
             74          (A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
             75      regardless of whether the taxpayer meets the requirements of Section 41(c)(3)(B)(i)(I) or (II);
             76      and
             77          (B) may not revoke an election to be treated as a start-up company under Subsection
             78      (4)(a)(iii)(A);
             79          (b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
             80      that the term includes only basic research conducted in this state;
             81          (c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
             82      that the term includes only qualified research conducted in this state;
             83          (d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
             84      Revenue Code, except that the term includes only:
             85          (i) in-house research expenses incurred in this state; and
             86          (ii) contract research expenses incurred in this state; and
             87          (e) a tax credit provided for in this section is not terminated if a credit terminates under
             88      Section 41, Internal Revenue Code.
             89          (5) (a) If the amount of a tax credit claimed by a taxpayer under Subsection (1)(a)(i) or


             90      (ii) exceeds the taxpayer's tax liability under this chapter for a taxable year, the amount of the
             91      tax credit exceeding the tax liability:
             92          (i) may be carried forward for a period that does not exceed the next 14 taxable years;
             93      and
             94          (ii) may not be carried back to a taxable year preceding the current taxable year.
             95          (b) A taxpayer may not carry forward the tax credit allowed by Subsection (1)(a)(iii).
             96          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             97      commission may make rules for purposes of this section prescribing a certification process for
             98      qualified organizations to ensure that amounts paid to the qualified organizations are for basic
             99      research conducted in this state.
             100          (7) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
             101      commission shall report the modification or repeal to the Revenue and Taxation Interim
             102      Committee within 60 days after the day on which the modification or repeal becomes effective.
             103          (8) (a) The Revenue and Taxation Interim Committee shall review the tax credits
             104      provided for in this section on or before October 1 of the year after the year in which the
             105      commission reports under Subsection (7) a modification or repeal of a provision of Section 41,
             106      Internal Revenue Code.
             107          (b) Notwithstanding Subsection (8)(a), the Revenue and Taxation Interim Committee is
             108      not required to review the tax credits provided for in this section if the only modification to a
             109      provision of Section 41, Internal Revenue Code, is the extension of the termination date
             110      provided for in Section 41(h), Internal Revenue Code.
             111          (c) The Revenue and Taxation Interim Committee shall address in a review under this
             112      section:
             113          (i) the cost of the tax credits provided for in this section;
             114          (ii) the purpose and effectiveness of the tax credits provided for in this section;
             115          (iii) whether the tax credits provided for in this section benefit the state; and
             116          (iv) whether the tax credits provided for in this section should be:
             117          (A) continued;
             118          (B) modified; or
             119          (C) repealed.
             120          (d) If the Revenue and Taxation Interim Committee reviews the tax credits provided


             121      for in this section, the committee shall report its findings to the Legislative Management
             122      Committee on or before the November interim meeting of the year in which the Revenue and
             123      Taxation Interim Committee reviews the tax credits.
             124          Section 2. Section 59-10-1012 is amended to read:
             125           59-10-1012. Tax credits for research activities conducted in the state -- Carry
             126      forward -- Commission to report modification or repeal of certain federal provisions --
             127      Revenue and Taxation Interim Committee study.
             128          (1) (a) A claimant, estate, or trust meeting the requirements of this section may claim
             129      the following nonrefundable tax credits:
             130          (i) a research tax credit of 5% of the claimant's, estate's, or trust's qualified research
             131      expenses for the current taxable year that exceed the base amount provided for under
             132      Subsection (3);
             133          (ii) a tax credit for a payment to a qualified organization for basic research as provided
             134      in Section 41(e), Internal Revenue Code of 5% for the current taxable year that exceed the base
             135      amount provided for under Subsection (3); and
             136          (iii) a tax credit equal to[: (A) for the taxable year beginning on or after January 1,
             137      2008, but beginning on or before December 31, 2008, 5% of the claimant's, estate's, or trust's
             138      qualified research expenses for the current taxable year; (B) for the taxable year beginning on
             139      or after January 1, 2009, but beginning on or before December 31, 2009, 6.3% of the
             140      claimant's, estate's, or trust's qualified research expenses for the current taxable year; or (C) for
             141      taxable years beginning on or after January 1, 2010, 9.2%] 7.5% of the claimant's, estate's, or
             142      trust's qualified research expenses for the current taxable year.
             143          (b) Subject to Subsection (4), a claimant, estate, or trust may claim a tax credit under:
             144          (i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the claimant, estate,
             145      or trust incurs the qualified research expenses; or
             146          (ii) Subsection (1)(a)(ii), for the taxable year for which the claimant, estate, or trust
             147      makes the payment to the qualified organization.
             148          (c) The tax credits provided for in this section do not include the alternative
             149      incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
             150          (2) Except as specifically provided for in this section:
             151          (a) the tax credits authorized under Subsection (1) shall be calculated as provided in


             152      Section 41, Internal Revenue Code; and
             153          (b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
             154      the tax credits authorized under Subsection (1).
             155          (3) For purposes of this section:
             156          (a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
             157      Internal Revenue Code, except that:
             158          (i) the base amount does not include the calculation of the alternative incremental
             159      credit provided for in Section 41(c)(4), Internal Revenue Code;
             160          (ii) a claimant's, estate's, or trust's gross receipts include only those gross receipts
             161      attributable to sources within this state as provided in Section 59-10-118 ; and
             162          (iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
             163      the base amount, a claimant, estate, or trust:
             164          (A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B),
             165      Internal Revenue Code, regardless of whether the claimant, estate, or trust meets the
             166      requirements of Section 41(c)(3)(B)(i)(I) or (II), Internal Revenue Code; and
             167          (B) may not revoke an election to be treated as a start-up company under Subsection
             168      (3)(a)(iii)(A);
             169          (b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
             170      that the term includes only basic research conducted in this state;
             171          (c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
             172      that the term includes only qualified research conducted in this state;
             173          (d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
             174      Revenue Code, except that the term includes only:
             175          (i) in-house research expenses incurred in this state; and
             176          (ii) contract research expenses incurred in this state; and
             177          (e) a tax credit provided for in this section is not terminated if a credit terminates under
             178      Section 41, Internal Revenue Code.
             179          (4) (a) If the amount of a tax credit claimed by a claimant, estate, or trust under
             180      Subsection (1)(a)(i) or (ii) exceeds the claimant's, estate's, or trust's tax liability under this
             181      chapter for a taxable year, the amount of the tax credit exceeding the tax liability:
             182          (i) may be carried forward for a period that does not exceed the next 14 taxable years;


             183      and
             184          (ii) may not be carried back to a taxable year preceding the current taxable year.
             185          (b) A claimant, estate, or trust may not carry forward the tax credit allowed by
             186      Subsection (1)(a)(iii).
             187          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             188      commission may make rules for purposes of this section prescribing a certification process for
             189      qualified organizations to ensure that amounts paid to the qualified organizations are for basic
             190      research conducted in this state.
             191          (6) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
             192      commission shall report the modification or repeal to the Revenue and Taxation Interim
             193      Committee within 60 days after the day on which the modification or repeal becomes effective.
             194          (7) (a) The Revenue and Taxation Interim Committee shall review the tax credits
             195      provided for in this section on or before October 1 of the year after the year in which the
             196      commission reports under Subsection (6) a modification or repeal of a provision of Section 41,
             197      Internal Revenue Code.
             198          (b) Notwithstanding Subsection (7)(a), the Revenue and Taxation Interim Committee is
             199      not required to review the tax credits provided for in this section if the only modification to a
             200      provision of Section 41, Internal Revenue Code, is the extension of the termination date
             201      provided for in Section 41(h), Internal Revenue Code.
             202          (c) The Revenue and Taxation Interim Committee shall address in a review under this
             203      section:
             204          (i) the cost of the tax credits provided for in this section;
             205          (ii) the purpose and effectiveness of the tax credits provided for in this section;
             206          (iii) whether the tax credits provided for in this section benefit the state; and
             207          (iv) whether the tax credits provided for in this section should be:
             208          (A) continued;
             209          (B) modified; or
             210          (C) repealed.
             211          (d) If the Revenue and Taxation Interim Committee reviews the tax credits provided
             212      for in this section, the committee shall report its findings to the Legislative Management
             213      Committee on or before the November interim meeting of the year in which the Revenue and


             214      Taxation Interim Committee reviews the tax credits.
             215          Section 3. Section 59-12-102 is amended to read:
             216           59-12-102. Definitions.
             217          As used in this chapter:
             218          (1) "800 service" means a telecommunications service that:
             219          (a) allows a caller to dial a toll-free number without incurring a charge for the call; and
             220          (b) is typically marketed:
             221          (i) under the name 800 toll-free calling;
             222          (ii) under the name 855 toll-free calling;
             223          (iii) under the name 866 toll-free calling;
             224          (iv) under the name 877 toll-free calling;
             225          (v) under the name 888 toll-free calling; or
             226          (vi) under a name similar to Subsections (1)(b)(i) through (v) as designated by the
             227      Federal Communications Commission.
             228          (2) (a) "900 service" means an inbound toll telecommunications service that:
             229          (i) a subscriber purchases;
             230          (ii) allows a customer of the subscriber described in Subsection (2)(a)(i) to call in to
             231      the subscriber's:
             232          (A) prerecorded announcement; or
             233          (B) live service; and
             234          (iii) is typically marketed:
             235          (A) under the name 900 service; or
             236          (B) under a name similar to Subsection (2)(a)(iii)(A) as designated by the Federal
             237      Communications Commission.
             238          (b) "900 service" does not include a charge for:
             239          (i) a collection service a seller of a telecommunications service provides to a
             240      subscriber; or
             241          (ii) the following a subscriber sells to the subscriber's customer:
             242          (A) a product; or
             243          (B) a service.
             244          (3) (a) "Admission or user fees" includes season passes.


             245          (b) "Admission or user fees" does not include annual membership dues to private
             246      organizations.
             247          (4) "Agreement" means the Streamlined Sales and Use Tax Agreement adopted on
             248      November 12, 2002, including amendments made to the Streamlined Sales and Use Tax
             249      Agreement after November 12, 2002.
             250          (5) "Agreement combined tax rate" means the sum of the tax rates:
             251          (a) listed under Subsection (6); and
             252          (b) that are imposed within a local taxing jurisdiction.
             253          (6) "Agreement sales and use tax" means a tax imposed under:
             254          (a) Subsection 59-12-103 (2)(a)(i)(A);
             255          (b) Subsection 59-12-103 (2)(b)(i);
             256          (c) Subsection 59-12-103 (2)(c)(i);
             257          (d) Subsection 59-12-103 (2)(d)(i)(A)(I);
             258          (e) Section 59-12-204 ;
             259          (f) Section 59-12-401 ;
             260          (g) Section 59-12-402 ;
             261          (h) Section 59-12-703 ;
             262          (i) Section 59-12-802 ;
             263          (j) Section 59-12-804 ;
             264          (k) Section 59-12-1102 ;
             265          (l) Section 59-12-1302 ;
             266          (m) Section 59-12-1402 ;
             267          (n) Section 59-12-1802 ;
             268          (o) Section 59-12-2003 ;
             269          (p) Section 59-12-2103 ;
             270          (q) Section 59-12-2213 ;
             271          (r) Section 59-12-2214 ;
             272          (s) Section 59-12-2215 ;
             273          (t) Section 59-12-2216 ;
             274          (u) Section 59-12-2217 ; or
             275          (v) Section 59-12-2218 .


             276          (7) "Aircraft" is as defined in Section 72-10-102 .
             277          (8) "Aircraft maintenance, repair, and overhaul provider" means a business entity:
             278          (a) except for an airline as defined in Section 59-2-102 or an affiliated group as defined
             279      in Subsection 59-12-107 (1)(f) of an airline; and
             280          (b) that has the workers, expertise, and facilities to perform the following, regardless of
             281      whether the business entity performs the following in this state:
             282          (i) check, diagnose, overhaul, and repair:
             283          (A) an onboard system of a fixed wing turbine powered aircraft; and
             284          (B) the parts that comprise an onboard system of a fixed wing turbine powered aircraft;
             285          (ii) assemble, change, dismantle, inspect, and test a fixed wing turbine powered aircraft
             286      engine;
             287          (iii) perform at least the following maintenance on a fixed wing turbine powered
             288      aircraft:
             289          (A) an inspection;
             290          (B) a repair, including a structural repair or modification;
             291          (C) changing landing gear; and
             292          (D) addressing issues related to an aging fixed wing turbine powered aircraft;
             293          (iv) completely remove the existing paint of a fixed wing turbine powered aircraft and
             294      completely apply new paint to the fixed wing turbine powered aircraft; and
             295          (v) refurbish the interior of a fixed wing turbine powered aircraft in a manner that
             296      results in a change in the fixed wing turbine powered aircraft's certification requirements by the
             297      authority that certifies the fixed wing turbine powered aircraft.
             298          (9) "Alcoholic beverage" means a beverage that:
             299          (a) is suitable for human consumption; and
             300          (b) contains .5% or more alcohol by volume.
             301          (10) (a) "Ancillary service" means a service associated with, or incidental to, the
             302      provision of telecommunications service.
             303          (b) "Ancillary service" includes:
             304          (i) a conference bridging service;
             305          (ii) a detailed communications billing service;
             306          (iii) directory assistance;


             307          (iv) a vertical service; or
             308          (v) a voice mail service.
             309          (11) "Area agency on aging" is as defined in Section 62A-3-101 .
             310          (12) "Assisted amusement device" means an amusement device, skill device, or ride
             311      device that is started and stopped by an individual:
             312          (a) who is not the purchaser or renter of the right to use or operate the amusement
             313      device, skill device, or ride device; and
             314          (b) at the direction of the seller of the right to use the amusement device, skill device,
             315      or ride device.
             316          (13) "Assisted cleaning or washing of tangible personal property" means cleaning or
             317      washing of tangible personal property if the cleaning or washing labor is primarily performed
             318      by an individual:
             319          (a) who is not the purchaser of the cleaning or washing of the tangible personal
             320      property; and
             321          (b) at the direction of the seller of the cleaning or washing of the tangible personal
             322      property.
             323          (14) "Authorized carrier" means:
             324          (a) in the case of vehicles operated over public highways, the holder of credentials
             325      indicating that the vehicle is or will be operated pursuant to both the International Registration
             326      Plan and the International Fuel Tax Agreement;
             327          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
             328      certificate or air carrier's operating certificate; or
             329          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             330      stock, the holder of a certificate issued by the United States Surface Transportation Board.
             331          (15) (a) Except as provided in Subsection (15)(b), "biomass energy" means any of the
             332      following that is used as the primary source of energy to produce fuel or electricity:
             333          (i) material from a plant or tree; or
             334          (ii) other organic matter that is available on a renewable basis, including:
             335          (A) slash and brush from forests and woodlands;
             336          (B) animal waste;
             337          (C) methane produced:


             338          (I) at landfills; or
             339          (II) as a byproduct of the treatment of wastewater residuals;
             340          (D) aquatic plants; and
             341          (E) agricultural products.
             342          (b) "Biomass energy" does not include:
             343          (i) black liquor;
             344          (ii) treated woods; or
             345          (iii) biomass from municipal solid waste other than methane produced:
             346          (A) at landfills; or
             347          (B) as a byproduct of the treatment of wastewater residuals.
             348          (16) (a) "Bundled transaction" means the sale of two or more items of tangible personal
             349      property, products, or services if the tangible personal property, products, or services are:
             350          (i) distinct and identifiable; and
             351          (ii) sold for one nonitemized price.
             352          (b) "Bundled transaction" does not include:
             353          (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
             354      the basis of the selection by the purchaser of the items of tangible personal property included in
             355      the transaction;
             356          (ii) the sale of real property;
             357          (iii) the sale of services to real property;
             358          (iv) the retail sale of tangible personal property and a service if:
             359          (A) the tangible personal property:
             360          (I) is essential to the use of the service; and
             361          (II) is provided exclusively in connection with the service; and
             362          (B) the service is the true object of the transaction;
             363          (v) the retail sale of two services if:
             364          (A) one service is provided that is essential to the use or receipt of a second service;
             365          (B) the first service is provided exclusively in connection with the second service; and
             366          (C) the second service is the true object of the transaction;
             367          (vi) a transaction that includes tangible personal property or a product subject to
             368      taxation under this chapter and tangible personal property or a product that is not subject to


             369      taxation under this chapter if the:
             370          (A) seller's purchase price of the tangible personal property or product subject to
             371      taxation under this chapter is de minimis; or
             372          (B) seller's sales price of the tangible personal property or product subject to taxation
             373      under this chapter is de minimis; and
             374          (vii) the retail sale of tangible personal property that is not subject to taxation under
             375      this chapter and tangible personal property that is subject to taxation under this chapter if:
             376          (A) that retail sale includes:
             377          (I) food and food ingredients;
             378          (II) a drug;
             379          (III) durable medical equipment;
             380          (IV) mobility enhancing equipment;
             381          (V) an over-the-counter drug;
             382          (VI) a prosthetic device; or
             383          (VII) a medical supply; and
             384          (B) subject to Subsection (16)(f):
             385          (I) the seller's purchase price of the tangible personal property subject to taxation under
             386      this chapter is 50% or less of the seller's total purchase price of that retail sale; or
             387          (II) the seller's sales price of the tangible personal property subject to taxation under
             388      this chapter is 50% or less of the seller's total sales price of that retail sale.
             389          (c) (i) For purposes of Subsection (16)(a)(i), tangible personal property, a product, or a
             390      service that is distinct and identifiable does not include:
             391          (A) packaging that:
             392          (I) accompanies the sale of the tangible personal property, product, or service; and
             393          (II) is incidental or immaterial to the sale of the tangible personal property, product, or
             394      service;
             395          (B) tangible personal property, a product, or a service provided free of charge with the
             396      purchase of another item of tangible personal property, a product, or a service; or
             397          (C) an item of tangible personal property, a product, or a service included in the
             398      definition of "purchase price."
             399          (ii) For purposes of Subsection (16)(c)(i)(B), an item of tangible personal property, a


             400      product, or a service is provided free of charge with the purchase of another item of tangible
             401      personal property, a product, or a service if the sales price of the purchased item of tangible
             402      personal property, product, or service does not vary depending on the inclusion of the tangible
             403      personal property, product, or service provided free of charge.
             404          (d) (i) For purposes of Subsection (16)(a)(ii), property sold for one nonitemized price
             405      does not include a price that is separately identified by tangible personal property, product, or
             406      service on the following, regardless of whether the following is in paper format or electronic
             407      format:
             408          (A) a binding sales document; or
             409          (B) another supporting sales-related document that is available to a purchaser.
             410          (ii) For purposes of Subsection (16)(d)(i), a binding sales document or another
             411      supporting sales-related document that is available to a purchaser includes:
             412          (A) a bill of sale;
             413          (B) a contract;
             414          (C) an invoice;
             415          (D) a lease agreement;
             416          (E) a periodic notice of rates and services;
             417          (F) a price list;
             418          (G) a rate card;
             419          (H) a receipt; or
             420          (I) a service agreement.
             421          (e) (i) For purposes of Subsection (16)(b)(vi), the sales price of tangible personal
             422      property or a product subject to taxation under this chapter is de minimis if:
             423          (A) the seller's purchase price of the tangible personal property or product is 10% or
             424      less of the seller's total purchase price of the bundled transaction; or
             425          (B) the seller's sales price of the tangible personal property or product is 10% or less of
             426      the seller's total sales price of the bundled transaction.
             427          (ii) For purposes of Subsection (16)(b)(vi), a seller:
             428          (A) shall use the seller's purchase price or the seller's sales price to determine if the
             429      purchase price or sales price of the tangible personal property or product subject to taxation
             430      under this chapter is de minimis; and


             431          (B) may not use a combination of the seller's purchase price and the seller's sales price
             432      to determine if the purchase price or sales price of the tangible personal property or product
             433      subject to taxation under this chapter is de minimis.
             434          (iii) For purposes of Subsection (16)(b)(vi), a seller shall use the full term of a service
             435      contract to determine if the sales price of tangible personal property or a product is de minimis.
             436          (f) For purposes of Subsection (16)(b)(vii)(B), a seller may not use a combination of
             437      the seller's purchase price and the seller's sales price to determine if tangible personal property
             438      subject to taxation under this chapter is 50% or less of the seller's total purchase price or sales
             439      price of that retail sale.
             440          (17) "Certified automated system" means software certified by the governing board of
             441      the agreement that:
             442          (a) calculates the agreement sales and use tax imposed within a local taxing
             443      jurisdiction:
             444          (i) on a transaction; and
             445          (ii) in the states that are members of the agreement;
             446          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             447      member of the agreement; and
             448          (c) maintains a record of the transaction described in Subsection (17)(a)(i).
             449          (18) "Certified service provider" means an agent certified:
             450          (a) by the governing board of the agreement; and
             451          (b) to perform all of a seller's sales and use tax functions for an agreement sales and
             452      use tax other than the seller's obligation under Section 59-12-124 to remit a tax on the seller's
             453      own purchases.
             454          (19) (a) Subject to Subsection (19)(b), "clothing" means all human wearing apparel
             455      suitable for general use.
             456          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             457      commission shall make rules:
             458          (i) listing the items that constitute "clothing"; and
             459          (ii) that are consistent with the list of items that constitute "clothing" under the
             460      agreement.
             461          (20) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.


             462          (21) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
             463      fuels that does not constitute industrial use under Subsection (48) or residential use under
             464      Subsection [(96)] (98).
             465          (22) (a) "Common carrier" means a person engaged in or transacting the business of
             466      transporting passengers, freight, merchandise, or other property for hire within this state.
             467          (b) (i) "Common carrier" does not include a person who, at the time the person is
             468      traveling to or from that person's place of employment, transports a passenger to or from the
             469      passenger's place of employment.
             470          (ii) For purposes of Subsection (22)(b)(i), in accordance with Title 63G, Chapter 3,
             471      Utah Administrative Rulemaking Act, the commission may make rules defining what
             472      constitutes a person's place of employment.
             473          (23) "Component part" includes:
             474          (a) poultry, dairy, and other livestock feed, and their components;
             475          (b) baling ties and twine used in the baling of hay and straw;
             476          (c) fuel used for providing temperature control of orchards and commercial
             477      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             478      off-highway type farm machinery; and
             479          (d) feed, seeds, and seedlings.
             480          (24) "Computer" means an electronic device that accepts information:
             481          (a) (i) in digital form; or
             482          (ii) in a form similar to digital form; and
             483          (b) manipulates that information for a result based on a sequence of instructions.
             484          (25) "Computer software" means a set of coded instructions designed to cause:
             485          (a) a computer to perform a task; or
             486          (b) automatic data processing equipment to perform a task.
             487          (26) (a) "Conference bridging service" means an ancillary service that links two or
             488      more participants of an audio conference call or video conference call.
             489          (b) "Conference bridging service" may include providing a telephone number as part of
             490      the ancillary service described in Subsection (26)(a).
             491          (c) "Conference bridging service" does not include a telecommunications service used
             492      to reach the ancillary service described in Subsection (26)(a).


             493          (27) "Construction materials" means any tangible personal property that will be
             494      converted into real property.
             495          (28) "Delivered electronically" means delivered to a purchaser by means other than
             496      tangible storage media.
             497          (29) (a) "Delivery charge" means a charge:
             498          (i) by a seller of:
             499          (A) tangible personal property;
             500          (B) a product transferred electronically; or
             501          (C) services; and
             502          (ii) for preparation and delivery of the tangible personal property, product transferred
             503      electronically, or services described in Subsection (29)(a)(i) to a location designated by the
             504      purchaser.
             505          (b) "Delivery charge" includes a charge for the following:
             506          (i) transportation;
             507          (ii) shipping;
             508          (iii) postage;
             509          (iv) handling;
             510          (v) crating; or
             511          (vi) packing.
             512          (30) "Detailed telecommunications billing service" means an ancillary service of
             513      separately stating information pertaining to individual calls on a customer's billing statement.
             514          (31) "Dietary supplement" means a product, other than tobacco, that:
             515          (a) is intended to supplement the diet;
             516          (b) contains one or more of the following dietary ingredients:
             517          (i) a vitamin;
             518          (ii) a mineral;
             519          (iii) an herb or other botanical;
             520          (iv) an amino acid;
             521          (v) a dietary substance for use by humans to supplement the diet by increasing the total
             522      dietary intake; or
             523          (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient


             524      described in Subsections (31)(b)(i) through (v);
             525          (c) (i) except as provided in Subsection (31)(c)(ii), is intended for ingestion in:
             526          (A) tablet form;
             527          (B) capsule form;
             528          (C) powder form;
             529          (D) softgel form;
             530          (E) gelcap form; or
             531          (F) liquid form; or
             532          (ii) notwithstanding Subsection (31)(c)(i), if the product is not intended for ingestion in
             533      a form described in Subsections (31)(c)(i)(A) through (F), is not represented:
             534          (A) as conventional food; and
             535          (B) for use as a sole item of:
             536          (I) a meal; or
             537          (II) the diet; and
             538          (d) is required to be labeled as a dietary supplement:
             539          (i) identifiable by the "Supplemental Facts" box found on the label; and
             540          (ii) as required by 21 C.F.R. Sec. 101.36.
             541          (32) (a) "Direct mail" means printed material delivered or distributed by United States
             542      mail or other delivery service:
             543          (i) to:
             544          (A) a mass audience; or
             545          (B) addressees on a mailing list provided:
             546          (I) by a purchaser of the mailing list; or
             547          (II) at the discretion of the purchaser of the mailing list; and
             548          (ii) if the cost of the printed material is not billed directly to the recipients.
             549          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
             550      purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             551          (c) "Direct mail" does not include multiple items of printed material delivered to a
             552      single address.
             553          (33) "Directory assistance" means an ancillary service of providing:
             554          (a) address information; or


             555          (b) telephone number information.
             556          (34) (a) "Disposable home medical equipment or supplies" means medical equipment
             557      or supplies that:
             558          (i) cannot withstand repeated use; and
             559          (ii) are purchased by, for, or on behalf of a person other than:
             560          (A) a health care facility as defined in Section 26-21-2 ;
             561          (B) a health care provider as defined in Section 78B-3-403 ;
             562          (C) an office of a health care provider described in Subsection (34)(a)(ii)(B); or
             563          (D) a person similar to a person described in Subsections (34)(a)(ii)(A) through (C).
             564          (b) "Disposable home medical equipment or supplies" does not include:
             565          (i) a drug;
             566          (ii) durable medical equipment;
             567          (iii) a hearing aid;
             568          (iv) a hearing aid accessory;
             569          (v) mobility enhancing equipment; or
             570          (vi) tangible personal property used to correct impaired vision, including:
             571          (A) eyeglasses; or
             572          (B) contact lenses.
             573          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             574      commission may by rule define what constitutes medical equipment or supplies.
             575          (35) (a) "Drug" means a compound, substance, or preparation, or a component of a
             576      compound, substance, or preparation that is:
             577          (i) recognized in:
             578          (A) the official United States Pharmacopoeia;
             579          (B) the official Homeopathic Pharmacopoeia of the United States;
             580          (C) the official National Formulary; or
             581          (D) a supplement to a publication listed in Subsections (35)(a)(i)(A) through (C);
             582          (ii) intended for use in the:
             583          (A) diagnosis of disease;
             584          (B) cure of disease;
             585          (C) mitigation of disease;


             586          (D) treatment of disease; or
             587          (E) prevention of disease; or
             588          (iii) intended to affect:
             589          (A) the structure of the body; or
             590          (B) any function of the body.
             591          (b) "Drug" does not include:
             592          (i) food and food ingredients;
             593          (ii) a dietary supplement;
             594          (iii) an alcoholic beverage; or
             595          (iv) a prosthetic device.
             596          (36) (a) Except as provided in Subsection (36)(c), "durable medical equipment" means
             597      equipment that:
             598          (i) can withstand repeated use;
             599          (ii) is primarily and customarily used to serve a medical purpose;
             600          (iii) generally is not useful to a person in the absence of illness or injury; and
             601          (iv) is not worn in or on the body.
             602          (b) "Durable medical equipment" includes parts used in the repair or replacement of the
             603      equipment described in Subsection (36)(a).
             604          (c) Notwithstanding Subsection (36)(a), "durable medical equipment" does not include
             605      mobility enhancing equipment.
             606          (37) "Electronic" means:
             607          (a) relating to technology; and
             608          (b) having:
             609          (i) electrical capabilities;
             610          (ii) digital capabilities;
             611          (iii) magnetic capabilities;
             612          (iv) wireless capabilities;
             613          (v) optical capabilities;
             614          (vi) electromagnetic capabilities; or
             615          (vii) capabilities similar to Subsections (37)(b)(i) through (vi).
             616          (38) "Employee" is as defined in Section 59-10-401 .


             617          (39) "Fixed guideway" means a public transit facility that uses and occupies:
             618          (a) rail for the use of public transit; or
             619          (b) a separate right-of-way for the use of public transit.
             620          (40) "Fixed wing turbine powered aircraft" means an aircraft that:
             621          (a) is powered by turbine engines;
             622          (b) operates on jet fuel; and
             623          (c) has wings that are permanently attached to the fuselage of the aircraft.
             624          (41) "Fixed wireless service" means a telecommunications service that provides radio
             625      communication between fixed points.
             626          (42) (a) "Food and food ingredients" means substances:
             627          (i) regardless of whether the substances are in:
             628          (A) liquid form;
             629          (B) concentrated form;
             630          (C) solid form;
             631          (D) frozen form;
             632          (E) dried form; or
             633          (F) dehydrated form; and
             634          (ii) that are:
             635          (A) sold for:
             636          (I) ingestion by humans; or
             637          (II) chewing by humans; and
             638          (B) consumed for the substance's:
             639          (I) taste; or
             640          (II) nutritional value.
             641          (b) "Food and food ingredients" includes an item described in Subsection [(79)]
             642      (81)(b)(iii).
             643          (c) "Food and food ingredients" does not include:
             644          (i) an alcoholic beverage;
             645          (ii) tobacco; or
             646          (iii) prepared food.
             647          (43) (a) "Fundraising sales" means sales:


             648          (i) (A) made by a school; or
             649          (B) made by a school student;
             650          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             651      materials, or provide transportation; and
             652          (iii) that are part of an officially sanctioned school activity.
             653          (b) For purposes of Subsection (43)(a)(iii), "officially sanctioned school activity"
             654      means a school activity:
             655          (i) that is conducted in accordance with a formal policy adopted by the school or school
             656      district governing the authorization and supervision of fundraising activities;
             657          (ii) that does not directly or indirectly compensate an individual teacher or other
             658      educational personnel by direct payment, commissions, or payment in kind; and
             659          (iii) the net or gross revenues from which are deposited in a dedicated account
             660      controlled by the school or school district.
             661          (44) "Geothermal energy" means energy contained in heat that continuously flows
             662      outward from the earth that is used as the sole source of energy to produce electricity.
             663          (45) "Governing board of the agreement" means the governing board of the agreement
             664      that is:
             665          (a) authorized to administer the agreement; and
             666          (b) established in accordance with the agreement.
             667          (46) (a) For purposes of Subsection 59-12-104 (41), "governmental entity" means:
             668          (i) the executive branch of the state, including all departments, institutions, boards,
             669      divisions, bureaus, offices, commissions, and committees;
             670          (ii) the judicial branch of the state, including the courts, the Judicial Council, the
             671      Office of the Court Administrator, and similar administrative units in the judicial branch;
             672          (iii) the legislative branch of the state, including the House of Representatives, the
             673      Senate, the Legislative Printing Office, the Office of Legislative Research and General
             674      Counsel, the Office of the Legislative Auditor General, and the Office of the Legislative Fiscal
             675      Analyst;
             676          (iv) the National Guard;
             677          (v) an independent entity as defined in Section 63E-1-102 ; or
             678          (vi) a political subdivision as defined in Section 17B-1-102 .


             679          (b) "Governmental entity" does not include the state systems of public and higher
             680      education, including:
             681          (i) a college campus of the Utah College of Applied Technology;
             682          (ii) a school;
             683          (iii) the State Board of Education;
             684          (iv) the State Board of Regents; or
             685          (v) an institution of higher education.
             686          (47) "Hydroelectric energy" means water used as the sole source of energy to produce
             687      electricity.
             688          (48) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
             689      other fuels:
             690          (a) in mining or extraction of minerals;
             691          (b) in agricultural operations to produce an agricultural product up to the time of
             692      harvest or placing the agricultural product into a storage facility, including:
             693          (i) commercial greenhouses;
             694          (ii) irrigation pumps;
             695          (iii) farm machinery;
             696          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             697      registered under Title 41, Chapter 1a, Part 2, Registration; and
             698          (v) other farming activities;
             699          (c) in manufacturing tangible personal property at an establishment described in SIC
             700      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             701      Executive Office of the President, Office of Management and Budget;
             702          (d) by a scrap recycler if:
             703          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             704      one or more of the following items into prepared grades of processed materials for use in new
             705      products:
             706          (A) iron;
             707          (B) steel;
             708          (C) nonferrous metal;
             709          (D) paper;


             710          (E) glass;
             711          (F) plastic;
             712          (G) textile; or
             713          (H) rubber; and
             714          (ii) the new products under Subsection (48)(d)(i) would otherwise be made with
             715      nonrecycled materials; or
             716          (e) in producing a form of energy or steam described in Subsection 54-2-1 (2)(a) by a
             717      cogeneration facility as defined in Section 54-2-1 .
             718          (49) (a) Except as provided in Subsection (49)(b), "installation charge" means a charge
             719      for installing:
             720          (i) tangible personal property; or
             721          (ii) a product transferred electronically.
             722          (b) "Installation charge" does not include a charge for:
             723          (i) repairs or renovations of:
             724          (A) tangible personal property; or
             725          (B) a product transferred electronically; or
             726          (ii) attaching tangible personal property or a product transferred electronically:
             727          (A) to other tangible personal property; and
             728          (B) as part of a manufacturing or fabrication process.
             729          (50) "Institution of higher education" means an institution of higher education listed in
             730      Section 53B-2-101 .
             731          (51) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             732      personal property or a product transferred electronically for:
             733          (i) (A) a fixed term; or
             734          (B) an indeterminate term; and
             735          (ii) consideration.
             736          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
             737      amount of consideration may be increased or decreased by reference to the amount realized
             738      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             739      Code.
             740          (c) "Lease" or "rental" does not include:


             741          (i) a transfer of possession or control of property under a security agreement or
             742      deferred payment plan that requires the transfer of title upon completion of the required
             743      payments;
             744          (ii) a transfer of possession or control of property under an agreement that requires the
             745      transfer of title:
             746          (A) upon completion of required payments; and
             747          (B) if the payment of an option price does not exceed the greater of:
             748          (I) $100; or
             749          (II) 1% of the total required payments; or
             750          (iii) providing tangible personal property along with an operator for a fixed period of
             751      time or an indeterminate period of time if the operator is necessary for equipment to perform as
             752      designed.
             753          (d) For purposes of Subsection(51)(c)(iii), an operator is necessary for equipment to
             754      perform as designed if the operator's duties exceed the:
             755          (i) set-up of tangible personal property;
             756          (ii) maintenance of tangible personal property; or
             757          (iii) inspection of tangible personal property.
             758          (52) "Life science establishment" means an establishment in this state that is classified
             759      under the following NAICS codes of the 2007 North American Industry Classification System
             760      of the federal Executive Office of the President, Office of Management and Budget:
             761          (a) NAICS Code 33911, Medical Equipment and Supplies Manufacturing;
             762          (b) NAICS Code 334510, Electromedical and Electrotherapeutic Apparatus
             763      Manufacturing; or
             764          (c) NAICS Code 334517, Irradiation Apparatus Manufacturing.
             765          (53) "Life science research and development facility" means a facility owned, leased,
             766      or rented by a life science establishment if research and development is performed in 51% or
             767      more of the total area of the facility.
             768          [(52)] (54) "Load and leave" means delivery to a purchaser by use of a tangible storage
             769      media if the tangible storage media is not physically transferred to the purchaser.
             770          [(53)] (55) "Local taxing jurisdiction" means a:
             771          (a) county that is authorized to impose an agreement sales and use tax;


             772          (b) city that is authorized to impose an agreement sales and use tax; or
             773          (c) town that is authorized to impose an agreement sales and use tax.
             774          [(54)] (56) "Manufactured home" is as defined in Section 15A-1-302 .
             775          [(55)] (57) For purposes of Section 59-12-104 , "manufacturing facility" means:
             776          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
             777      Industrial Classification Manual of the federal Executive Office of the President, Office of
             778      Management and Budget;
             779          (b) a scrap recycler if:
             780          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             781      one or more of the following items into prepared grades of processed materials for use in new
             782      products:
             783          (A) iron;
             784          (B) steel;
             785          (C) nonferrous metal;
             786          (D) paper;
             787          (E) glass;
             788          (F) plastic;
             789          (G) textile; or
             790          (H) rubber; and
             791          (ii) the new products under Subsection [(55)] (57)(b)(i) would otherwise be made with
             792      nonrecycled materials; or
             793          (c) a cogeneration facility as defined in Section 54-2-1 .
             794          [(56)] (58) "Member of the immediate family of the producer" means a person who is
             795      related to a producer described in Subsection 59-12-104 (20)(a) as a:
             796          (a) child or stepchild, regardless of whether the child or stepchild is:
             797          (i) an adopted child or adopted stepchild; or
             798          (ii) a foster child or foster stepchild;
             799          (b) grandchild or stepgrandchild;
             800          (c) grandparent or stepgrandparent;
             801          (d) nephew or stepnephew;
             802          (e) niece or stepniece;


             803          (f) parent or stepparent;
             804          (g) sibling or stepsibling;
             805          (h) spouse;
             806          (i) person who is the spouse of a person described in Subsections [(56)] (58)(a) through
             807      (g); or
             808          (j) person similar to a person described in Subsections [(56)] (58)(a) through (i) as
             809      determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             810      Administrative Rulemaking Act.
             811          [(57)] (59) "Mobile home" is as defined in Section 15A-1-302 .
             812          [(58)] (60) "Mobile telecommunications service" is as defined in the Mobile
             813      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             814          [(59)] (61) (a) "Mobile wireless service" means a telecommunications service,
             815      regardless of the technology used, if:
             816          (i) the origination point of the conveyance, routing, or transmission is not fixed;
             817          (ii) the termination point of the conveyance, routing, or transmission is not fixed; or
             818          (iii) the origination point described in Subsection [(59)] (61)(a)(i) and the termination
             819      point described in Subsection [(59)] (61)(a)(ii) are not fixed.
             820          (b) "Mobile wireless service" includes a telecommunications service that is provided
             821      by a commercial mobile radio service provider.
             822          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             823      commission may by rule define "commercial mobile radio service provider."
             824          [(60)] (62) (a) Except as provided in Subsection [(60)] (62)(c), "mobility enhancing
             825      equipment" means equipment that is:
             826          (i) primarily and customarily used to provide or increase the ability to move from one
             827      place to another;
             828          (ii) appropriate for use in a:
             829          (A) home; or
             830          (B) motor vehicle; and
             831          (iii) not generally used by persons with normal mobility.
             832          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
             833      the equipment described in Subsection [(60)] (62)(a).


             834          (c) Notwithstanding Subsection [(60)] (62)(a), "mobility enhancing equipment" does
             835      not include:
             836          (i) a motor vehicle;
             837          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
             838      vehicle manufacturer;
             839          (iii) durable medical equipment; or
             840          (iv) a prosthetic device.
             841          [(61)] (63) "Model 1 seller" means a seller registered under the agreement that has
             842      selected a certified service provider as the seller's agent to perform all of the seller's sales and
             843      use tax functions for agreement sales and use taxes other than the seller's obligation under
             844      Section 59-12-124 to remit a tax on the seller's own purchases.
             845          [(62)] (64) "Model 2 seller" means a seller registered under the agreement that:
             846          (a) except as provided in Subsection [(62)] (64)(b), has selected a certified automated
             847      system to perform the seller's sales tax functions for agreement sales and use taxes; and
             848          (b) notwithstanding Subsection [(62)] (64)(a), retains responsibility for remitting all of
             849      the sales tax:
             850          (i) collected by the seller; and
             851          (ii) to the appropriate local taxing jurisdiction.
             852          [(63)] (65) (a) Subject to Subsection [(63)] (65)(b), "model 3 seller" means a seller
             853      registered under the agreement that has:
             854          (i) sales in at least five states that are members of the agreement;
             855          (ii) total annual sales revenues of at least $500,000,000;
             856          (iii) a proprietary system that calculates the amount of tax:
             857          (A) for an agreement sales and use tax; and
             858          (B) due to each local taxing jurisdiction; and
             859          (iv) entered into a performance agreement with the governing board of the agreement.
             860          (b) For purposes of Subsection [(63)] (65)(a), "model 3 seller" includes an affiliated
             861      group of sellers using the same proprietary system.
             862          [(64)] (66) "Model 4 seller" means a seller that is registered under the agreement and is
             863      not a model 1 seller, model 2 seller, or model 3 seller.
             864          [(65)] (67) "Modular home" means a modular unit as defined in Section 15A-1-302 .


             865          [(66)] (68) "Motor vehicle" is as defined in Section 41-1a-102 .
             866          [(67)] (69) "Oil shale" means a group of fine black to dark brown shales containing
             867      bituminous material that yields petroleum upon distillation.
             868          [(68)] (70) (a) "Other fuels" means products that burn independently to produce heat or
             869      energy.
             870          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             871      personal property.
             872          [(69)] (71) (a) "Paging service" means a telecommunications service that provides
             873      transmission of a coded radio signal for the purpose of activating a specific pager.
             874          (b) For purposes of Subsection [(69)] (71)(a), the transmission of a coded radio signal
             875      includes a transmission by message or sound.
             876          [(70)] (72) "Pawnbroker" is as defined in Section 13-32a-102 .
             877          [(71)] (73) "Pawn transaction" is as defined in Section 13-32a-102 .
             878          [(72)] (74) (a) "Permanently attached to real property" means that for tangible personal
             879      property attached to real property:
             880          (i) the attachment of the tangible personal property to the real property:
             881          (A) is essential to the use of the tangible personal property; and
             882          (B) suggests that the tangible personal property will remain attached to the real
             883      property in the same place over the useful life of the tangible personal property; or
             884          (ii) if the tangible personal property is detached from the real property, the detachment
             885      would:
             886          (A) cause substantial damage to the tangible personal property; or
             887          (B) require substantial alteration or repair of the real property to which the tangible
             888      personal property is attached.
             889          (b) "Permanently attached to real property" includes:
             890          (i) the attachment of an accessory to the tangible personal property if the accessory is:
             891          (A) essential to the operation of the tangible personal property; and
             892          (B) attached only to facilitate the operation of the tangible personal property;
             893          (ii) a temporary detachment of tangible personal property from real property for a
             894      repair or renovation if the repair or renovation is performed where the tangible personal
             895      property and real property are located; or


             896          (iii) property attached to oil, gas, or water pipelines, except for the property listed in
             897      Subsection [(72)] (74)(c)(iii) or (iv).
             898          (c) "Permanently attached to real property" does not include:
             899          (i) the attachment of portable or movable tangible personal property to real property if
             900      that portable or movable tangible personal property is attached to real property only for:
             901          (A) convenience;
             902          (B) stability; or
             903          (C) for an obvious temporary purpose;
             904          (ii) the detachment of tangible personal property from real property except for the
             905      detachment described in Subsection [(72)] (74)(b)(ii);
             906          (iii) an attachment of the following tangible personal property to real property if the
             907      attachment to real property is only through a line that supplies water, electricity, gas,
             908      telecommunications, cable, or supplies a similar item as determined by the commission by rule
             909      made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
             910          (A) a computer;
             911          (B) a telephone;
             912          (C) a television; or
             913          (D) tangible personal property similar to Subsections [(72)] (74)(c)(iii)(A) through (C)
             914      as determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             915      Administrative Rulemaking Act; or
             916          (iv) an item listed in Subsection [(113)] (115)(c).
             917          [(73)] (75) "Person" includes any individual, firm, partnership, joint venture,
             918      association, corporation, estate, trust, business trust, receiver, syndicate, this state, any county,
             919      city, municipality, district, or other local governmental entity of the state, or any group or
             920      combination acting as a unit.
             921          [(74)] (76) "Place of primary use":
             922          (a) for telecommunications service other than mobile telecommunications service,
             923      means the street address representative of where the customer's use of the telecommunications
             924      service primarily occurs, which shall be:
             925          (i) the residential street address of the customer; or
             926          (ii) the primary business street address of the customer; or


             927          (b) for mobile telecommunications service, is as defined in the Mobile
             928      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             929          [(75)] (77) (a) "Postpaid calling service" means a telecommunications service a person
             930      obtains by making a payment on a call-by-call basis:
             931          (i) through the use of a:
             932          (A) bank card;
             933          (B) credit card;
             934          (C) debit card; or
             935          (D) travel card; or
             936          (ii) by a charge made to a telephone number that is not associated with the origination
             937      or termination of the telecommunications service.
             938          (b) "Postpaid calling service" includes a service, except for a prepaid wireless calling
             939      service, that would be a prepaid wireless calling service if the service were exclusively a
             940      telecommunications service.
             941          [(76)] (78) "Postproduction" means an activity related to the finishing or duplication of
             942      a medium described in Subsection 59-12-104 (54)(a).
             943          [(77)] (79) "Prepaid calling service" means a telecommunications service:
             944          (a) that allows a purchaser access to telecommunications service that is exclusively
             945      telecommunications service;
             946          (b) that:
             947          (i) is paid for in advance; and
             948          (ii) enables the origination of a call using an:
             949          (A) access number; or
             950          (B) authorization code;
             951          (c) that is dialed:
             952          (i) manually; or
             953          (ii) electronically; and
             954          (d) sold in predetermined units or dollars that decline:
             955          (i) by a known amount; and
             956          (ii) with use.
             957          [(78)] (80) "Prepaid wireless calling service" means a telecommunications service:


             958          (a) that provides the right to utilize:
             959          (i) mobile wireless service; and
             960          (ii) other service that is not a telecommunications service, including:
             961          (A) the download of a product transferred electronically;
             962          (B) a content service; or
             963          (C) an ancillary service;
             964          (b) that:
             965          (i) is paid for in advance; and
             966          (ii) enables the origination of a call using an:
             967          (A) access number; or
             968          (B) authorization code;
             969          (c) that is dialed:
             970          (i) manually; or
             971          (ii) electronically; and
             972          (d) sold in predetermined units or dollars that decline:
             973          (i) by a known amount; and
             974          (ii) with use.
             975          [(79)] (81) (a) "Prepared food" means:
             976          (i) food:
             977          (A) sold in a heated state; or
             978          (B) heated by a seller;
             979          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             980      item; or
             981          (iii) except as provided in Subsection [(79)] (81)(c), food sold with an eating utensil
             982      provided by the seller, including a:
             983          (A) plate;
             984          (B) knife;
             985          (C) fork;
             986          (D) spoon;
             987          (E) glass;
             988          (F) cup;


             989          (G) napkin; or
             990          (H) straw.
             991          (b) "Prepared food" does not include:
             992          (i) food that a seller only:
             993          (A) cuts;
             994          (B) repackages; or
             995          (C) pasteurizes; or
             996          (ii) (A) the following:
             997          (I) raw egg;
             998          (II) raw fish;
             999          (III) raw meat;
             1000          (IV) raw poultry; or
             1001          (V) a food containing an item described in Subsections [(79)] (81)(b)(ii)(A)(I) through
             1002      (IV); and
             1003          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             1004      Food and Drug Administration's Food Code that a consumer cook the items described in
             1005      Subsection [(79)] (81)(b)(ii)(A) to prevent food borne illness; or
             1006          (iii) the following if sold without eating utensils provided by the seller:
             1007          (A) food and food ingredients sold by a seller if the seller's proper primary
             1008      classification under the 2002 North American Industry Classification System of the federal
             1009      Executive Office of the President, Office of Management and Budget, is manufacturing in
             1010      Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
             1011      Manufacturing;
             1012          (B) food and food ingredients sold in an unheated state:
             1013          (I) by weight or volume; and
             1014          (II) as a single item; or
             1015          (C) a bakery item, including:
             1016          (I) a bagel;
             1017          (II) a bar;
             1018          (III) a biscuit;
             1019          (IV) bread;


             1020          (V) a bun;
             1021          (VI) a cake;
             1022          (VII) a cookie;
             1023          (VIII) a croissant;
             1024          (IX) a danish;
             1025          (X) a donut;
             1026          (XI) a muffin;
             1027          (XII) a pastry;
             1028          (XIII) a pie;
             1029          (XIV) a roll;
             1030          (XV) a tart;
             1031          (XVI) a torte; or
             1032          (XVII) a tortilla.
             1033          (c) Notwithstanding Subsection [(79)] (81)(a)(iii), an eating utensil provided by the
             1034      seller does not include the following used to transport the food:
             1035          (i) a container; or
             1036          (ii) packaging.
             1037          [(80)] (82) "Prescription" means an order, formula, or recipe that is issued:
             1038          (a) (i) orally;
             1039          (ii) in writing;
             1040          (iii) electronically; or
             1041          (iv) by any other manner of transmission; and
             1042          (b) by a licensed practitioner authorized by the laws of a state.
             1043          [(81)] (83) (a) Except as provided in Subsection [(81)] (83)(b)(ii) or (iii), "prewritten
             1044      computer software" means computer software that is not designed and developed:
             1045          (i) by the author or other creator of the computer software; and
             1046          (ii) to the specifications of a specific purchaser.
             1047          (b) "Prewritten computer software" includes:
             1048          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
             1049      software is not designed and developed:
             1050          (A) by the author or other creator of the computer software; and


             1051          (B) to the specifications of a specific purchaser;
             1052          (ii) notwithstanding Subsection [(81)] (83)(a), computer software designed and
             1053      developed by the author or other creator of the computer software to the specifications of a
             1054      specific purchaser if the computer software is sold to a person other than the purchaser; or
             1055          (iii) notwithstanding Subsection [(81)] (83)(a) and except as provided in Subsection
             1056      [(81)] (83)(c), prewritten computer software or a prewritten portion of prewritten computer
             1057      software:
             1058          (A) that is modified or enhanced to any degree; and
             1059          (B) if the modification or enhancement described in Subsection [(81)] (83)(b)(iii)(A) is
             1060      designed and developed to the specifications of a specific purchaser.
             1061          (c) Notwithstanding Subsection [(81)] (83)(b)(iii), "prewritten computer software"
             1062      does not include a modification or enhancement described in Subsection [(81)] (83)(b)(iii) if
             1063      the charges for the modification or enhancement are:
             1064          (i) reasonable; and
             1065          (ii) separately stated on the invoice or other statement of price provided to the
             1066      purchaser.
             1067          [(82)] (84) (a) "Private communication service" means a telecommunications service:
             1068          (i) that entitles a customer to exclusive or priority use of one or more communications
             1069      channels between or among termination points; and
             1070          (ii) regardless of the manner in which the one or more communications channels are
             1071      connected.
             1072          (b) "Private communications service" includes the following provided in connection
             1073      with the use of one or more communications channels:
             1074          (i) an extension line;
             1075          (ii) a station;
             1076          (iii) switching capacity; or
             1077          (iv) another associated service that is provided in connection with the use of one or
             1078      more communications channels as defined in Section 59-12-215 .
             1079          [(83)] (85) (a) Except as provided in Subsection [(83)] (85)(b), "product transferred
             1080      electronically" means a product transferred electronically that would be subject to a tax under
             1081      this chapter if that product was transferred in a manner other than electronically.


             1082          (b) "Product transferred electronically" does not include:
             1083          (i) an ancillary service;
             1084          (ii) computer software; or
             1085          (iii) a telecommunications service.
             1086          [(84)] (86) (a) "Prosthetic device" means a device that is worn on or in the body to:
             1087          (i) artificially replace a missing portion of the body;
             1088          (ii) prevent or correct a physical deformity or physical malfunction; or
             1089          (iii) support a weak or deformed portion of the body.
             1090          (b) "Prosthetic device" includes:
             1091          (i) parts used in the repairs or renovation of a prosthetic device;
             1092          (ii) replacement parts for a prosthetic device;
             1093          (iii) a dental prosthesis; or
             1094          (iv) a hearing aid.
             1095          (c) "Prosthetic device" does not include:
             1096          (i) corrective eyeglasses; or
             1097          (ii) contact lenses.
             1098          [(85)] (87) (a) "Protective equipment" means an item:
             1099          (i) for human wear; and
             1100          (ii) that is:
             1101          (A) designed as protection:
             1102          (I) to the wearer against injury or disease; or
             1103          (II) against damage or injury of other persons or property; and
             1104          (B) not suitable for general use.
             1105          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1106      commission shall make rules:
             1107          (i) listing the items that constitute "protective equipment"; and
             1108          (ii) that are consistent with the list of items that constitute "protective equipment"
             1109      under the agreement.
             1110          [(86)] (88) (a) For purposes of Subsection 59-12-104 (41), "publication" means any
             1111      written or printed matter, other than a photocopy:
             1112          (i) regardless of:


             1113          (A) characteristics;
             1114          (B) copyright;
             1115          (C) form;
             1116          (D) format;
             1117          (E) method of reproduction; or
             1118          (F) source; and
             1119          (ii) made available in printed or electronic format.
             1120          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1121      commission may by rule define the term "photocopy."
             1122          [(87)] (89) (a) "Purchase price" and "sales price" mean the total amount of
             1123      consideration:
             1124          (i) valued in money; and
             1125          (ii) for which tangible personal property, a product transferred electronically, or
             1126      services are:
             1127          (A) sold;
             1128          (B) leased; or
             1129          (C) rented.
             1130          (b) "Purchase price" and "sales price" include:
             1131          (i) the seller's cost of the tangible personal property, a product transferred
             1132      electronically, or services sold;
             1133          (ii) expenses of the seller, including:
             1134          (A) the cost of materials used;
             1135          (B) a labor cost;
             1136          (C) a service cost;
             1137          (D) interest;
             1138          (E) a loss;
             1139          (F) the cost of transportation to the seller; or
             1140          (G) a tax imposed on the seller;
             1141          (iii) a charge by the seller for any service necessary to complete the sale; or
             1142          (iv) consideration a seller receives from a person other than the purchaser if:
             1143          (A) (I) the seller actually receives consideration from a person other than the purchaser;


             1144      and
             1145          (II) the consideration described in Subsection [(87)] (89)(b)(iv)(A)(I) is directly related
             1146      to a price reduction or discount on the sale;
             1147          (B) the seller has an obligation to pass the price reduction or discount through to the
             1148      purchaser;
             1149          (C) the amount of the consideration attributable to the sale is fixed and determinable by
             1150      the seller at the time of the sale to the purchaser; and
             1151          (D) (I) (Aa) the purchaser presents a certificate, coupon, or other documentation to the
             1152      seller to claim a price reduction or discount; and
             1153          (Bb) a person other than the seller authorizes, distributes, or grants the certificate,
             1154      coupon, or other documentation with the understanding that the person other than the seller
             1155      will reimburse any seller to whom the certificate, coupon, or other documentation is presented;
             1156          (II) the purchaser identifies that purchaser to the seller as a member of a group or
             1157      organization allowed a price reduction or discount, except that a preferred customer card that is
             1158      available to any patron of a seller does not constitute membership in a group or organization
             1159      allowed a price reduction or discount; or
             1160          (III) the price reduction or discount is identified as a third party price reduction or
             1161      discount on the:
             1162          (Aa) invoice the purchaser receives; or
             1163          (Bb) certificate, coupon, or other documentation the purchaser presents.
             1164          (c) "Purchase price" and "sales price" do not include:
             1165          (i) a discount:
             1166          (A) in a form including:
             1167          (I) cash;
             1168          (II) term; or
             1169          (III) coupon;
             1170          (B) that is allowed by a seller;
             1171          (C) taken by a purchaser on a sale; and
             1172          (D) that is not reimbursed by a third party; or
             1173          (ii) the following if separately stated on an invoice, bill of sale, or similar document
             1174      provided to the purchaser:


             1175          (A) the following from credit extended on the sale of tangible personal property or
             1176      services:
             1177          (I) a carrying charge;
             1178          (II) a financing charge; or
             1179          (III) an interest charge;
             1180          (B) a delivery charge;
             1181          (C) an installation charge;
             1182          (D) a manufacturer rebate on a motor vehicle; or
             1183          (E) a tax or fee legally imposed directly on the consumer.
             1184          [(88)] (90) "Purchaser" means a person to whom:
             1185          (a) a sale of tangible personal property is made;
             1186          (b) a product is transferred electronically; or
             1187          (c) a service is furnished.
             1188          [(89)] (91) "Regularly rented" means:
             1189          (a) rented to a guest for value three or more times during a calendar year; or
             1190          (b) advertised or held out to the public as a place that is regularly rented to guests for
             1191      value.
             1192          [(90)] (92) "Renewable energy" means:
             1193          (a) biomass energy;
             1194          (b) hydroelectric energy;
             1195          (c) geothermal energy;
             1196          (d) solar energy; or
             1197          (e) wind energy.
             1198          [(91)] (93) (a) "Renewable energy production facility" means a facility that:
             1199          (i) uses renewable energy to produce electricity; and
             1200          (ii) has a production capacity of 20 kilowatts or greater.
             1201          (b) A facility is a renewable energy production facility regardless of whether the
             1202      facility is:
             1203          (i) connected to an electric grid; or
             1204          (ii) located on the premises of an electricity consumer.
             1205          [(92)] (94) "Rental" is as defined in Subsection (51).


             1206          [(93)] (95) (a) Except as provided in Subsection [(93)] (95)(b), "repairs or renovations
             1207      of tangible personal property" means:
             1208          (i) a repair or renovation of tangible personal property that is not permanently attached
             1209      to real property; or
             1210          (ii) attaching tangible personal property or a product transferred electronically to other
             1211      tangible personal property if:
             1212          (A) the other tangible personal property to which the tangible personal property or
             1213      product transferred electronically is attached is not permanently attached to real property; and
             1214          (B) the attachment of tangible personal property or a product transferred electronically
             1215      to other tangible personal property is made in conjunction with a repair or replacement of
             1216      tangible personal property or a product transferred electronically.
             1217          (b) "Repairs or renovations of tangible personal property" does not include attaching
             1218      prewritten computer software to other tangible personal property if the other tangible personal
             1219      property to which the prewritten computer software is attached is not permanently attached to
             1220      real property.
             1221          [(94)] (96) "Research and development" means the process of inquiry or
             1222      experimentation aimed at the discovery of facts, devices, technologies, or applications and the
             1223      process of preparing those devices, technologies, or applications for marketing.
             1224          [(95)] (97) (a) "Residential telecommunications services" means a telecommunications
             1225      service or an ancillary service that is provided to an individual for personal use:
             1226          (i) at a residential address; or
             1227          (ii) at an institution, including a nursing home or a school, if the telecommunications
             1228      service or ancillary service is provided to and paid for by the individual residing at the
             1229      institution rather than the institution.
             1230          (b) For purposes of Subsection [(95)] (97)(a)(i), a residential address includes an:
             1231          (i) apartment; or
             1232          (ii) other individual dwelling unit.
             1233          [(96)] (98) "Residential use" means the use in or around a home, apartment building,
             1234      sleeping quarters, and similar facilities or accommodations.
             1235          [(97)] (99) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose
             1236      other than:


             1237          (a) resale;
             1238          (b) sublease; or
             1239          (c) subrent.
             1240          [(98)] (100) (a) "Retailer" means any person engaged in a regularly organized business
             1241      in tangible personal property or any other taxable transaction under Subsection 59-12-103 (1),
             1242      and who is selling to the user or consumer and not for resale.
             1243          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             1244      engaged in the business of selling to users or consumers within the state.
             1245          [(99)] (101) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             1246      otherwise, in any manner, of tangible personal property or any other taxable transaction under
             1247      Subsection 59-12-103 (1), for consideration.
             1248          (b) "Sale" includes:
             1249          (i) installment and credit sales;
             1250          (ii) any closed transaction constituting a sale;
             1251          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
             1252      chapter;
             1253          (iv) any transaction if the possession of property is transferred but the seller retains the
             1254      title as security for the payment of the price; and
             1255          (v) any transaction under which right to possession, operation, or use of any article of
             1256      tangible personal property is granted under a lease or contract and the transfer of possession
             1257      would be taxable if an outright sale were made.
             1258          [(100)] (102) "Sale at retail" is as defined in Subsection [(97)] (99).
             1259          [(101)] (103) "Sale-leaseback transaction" means a transaction by which title to
             1260      tangible personal property or a product transferred electronically that is subject to a tax under
             1261      this chapter is transferred:
             1262          (a) by a purchaser-lessee;
             1263          (b) to a lessor;
             1264          (c) for consideration; and
             1265          (d) if:
             1266          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             1267      of the tangible personal property or product transferred electronically;


             1268          (ii) the sale of the tangible personal property or product transferred electronically to the
             1269      lessor is intended as a form of financing:
             1270          (A) for the tangible personal property or product transferred electronically; and
             1271          (B) to the purchaser-lessee; and
             1272          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             1273      is required to:
             1274          (A) capitalize the tangible personal property or product transferred electronically for
             1275      financial reporting purposes; and
             1276          (B) account for the lease payments as payments made under a financing arrangement.
             1277          [(102)] (104) "Sales price" is as defined in Subsection [(87)] (89).
             1278          [(103)] (105) (a) "Sales relating to schools" means the following sales by, amounts
             1279      paid to, or amounts charged by a school:
             1280          (i) sales that are directly related to the school's educational functions or activities
             1281      including:
             1282          (A) the sale of:
             1283          (I) textbooks;
             1284          (II) textbook fees;
             1285          (III) laboratory fees;
             1286          (IV) laboratory supplies; or
             1287          (V) safety equipment;
             1288          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             1289      that:
             1290          (I) a student is specifically required to wear as a condition of participation in a
             1291      school-related event or school-related activity; and
             1292          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             1293      place of ordinary clothing;
             1294          (C) sales of the following if the net or gross revenues generated by the sales are
             1295      deposited into a school district fund or school fund dedicated to school meals:
             1296          (I) food and food ingredients; or
             1297          (II) prepared food; or
             1298          (D) transportation charges for official school activities; or


             1299          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             1300      event or school-related activity.
             1301          (b) "Sales relating to schools" does not include:
             1302          (i) bookstore sales of items that are not educational materials or supplies;
             1303          (ii) except as provided in Subsection [(103)] (105)(a)(i)(B):
             1304          (A) clothing;
             1305          (B) clothing accessories or equipment;
             1306          (C) protective equipment; or
             1307          (D) sports or recreational equipment; or
             1308          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             1309      event or school-related activity if the amounts paid or charged are passed through to a person:
             1310          (A) other than a:
             1311          (I) school;
             1312          (II) nonprofit organization authorized by a school board or a governing body of a
             1313      private school to organize and direct a competitive secondary school activity; or
             1314          (III) nonprofit association authorized by a school board or a governing body of a
             1315      private school to organize and direct a competitive secondary school activity; and
             1316          (B) that is required to collect sales and use taxes under this chapter.
             1317          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1318      commission may make rules defining the term "passed through."
             1319          [(104)] (106) For purposes of this section and Section 59-12-104 , "school":
             1320          (a) means:
             1321          (i) an elementary school or a secondary school that:
             1322          (A) is a:
             1323          (I) public school; or
             1324          (II) private school; and
             1325          (B) provides instruction for one or more grades kindergarten through 12; or
             1326          (ii) a public school district; and
             1327          (b) includes the Electronic High School as defined in Section 53A-15-1002 .
             1328          [(105)] (107) "Seller" means a person that makes a sale, lease, or rental of:
             1329          (a) tangible personal property;


             1330          (b) a product transferred electronically; or
             1331          (c) a service.
             1332          [(106)] (108) (a) "Semiconductor fabricating, processing, research, or development
             1333      materials" means tangible personal property or a product transferred electronically if the
             1334      tangible personal property or product transferred electronically is:
             1335          (i) used primarily in the process of:
             1336          (A) (I) manufacturing a semiconductor;
             1337          (II) fabricating a semiconductor; or
             1338          (III) research or development of a:
             1339          (Aa) semiconductor; or
             1340          (Bb) semiconductor manufacturing process; or
             1341          (B) maintaining an environment suitable for a semiconductor; or
             1342          (ii) consumed primarily in the process of:
             1343          (A) (I) manufacturing a semiconductor;
             1344          (II) fabricating a semiconductor; or
             1345          (III) research or development of a:
             1346          (Aa) semiconductor; or
             1347          (Bb) semiconductor manufacturing process; or
             1348          (B) maintaining an environment suitable for a semiconductor.
             1349          (b) "Semiconductor fabricating, processing, research, or development materials"
             1350      includes:
             1351          (i) parts used in the repairs or renovations of tangible personal property or a product
             1352      transferred electronically described in Subsection [(106)] (108)(a); or
             1353          (ii) a chemical, catalyst, or other material used to:
             1354          (A) produce or induce in a semiconductor a:
             1355          (I) chemical change; or
             1356          (II) physical change;
             1357          (B) remove impurities from a semiconductor; or
             1358          (C) improve the marketable condition of a semiconductor.
             1359          [(107)] (109) "Senior citizen center" means a facility having the primary purpose of
             1360      providing services to the aged as defined in Section 62A-3-101 .


             1361          [(108)] (110) "Simplified electronic return" means the electronic return:
             1362          (a) described in Section 318(C) of the agreement; and
             1363          (b) approved by the governing board of the agreement.
             1364          [(109)] (111) "Solar energy" means the sun used as the sole source of energy for
             1365      producing electricity.
             1366          [(110)] (112) (a) "Sports or recreational equipment" means an item:
             1367          (i) designed for human use; and
             1368          (ii) that is:
             1369          (A) worn in conjunction with:
             1370          (I) an athletic activity; or
             1371          (II) a recreational activity; and
             1372          (B) not suitable for general use.
             1373          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1374      commission shall make rules:
             1375          (i) listing the items that constitute "sports or recreational equipment"; and
             1376          (ii) that are consistent with the list of items that constitute "sports or recreational
             1377      equipment" under the agreement.
             1378          [(111)] (113) "State" means the state of Utah, its departments, and agencies.
             1379          [(112)] (114) "Storage" means any keeping or retention of tangible personal property or
             1380      any other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose
             1381      except sale in the regular course of business.
             1382          [(113)] (115) (a) Except as provided in Subsection [(113)] (115)(d) or (e), "tangible
             1383      personal property" means personal property that:
             1384          (i) may be:
             1385          (A) seen;
             1386          (B) weighed;
             1387          (C) measured;
             1388          (D) felt; or
             1389          (E) touched; or
             1390          (ii) is in any manner perceptible to the senses.
             1391          (b) "Tangible personal property" includes:


             1392          (i) electricity;
             1393          (ii) water;
             1394          (iii) gas;
             1395          (iv) steam; or
             1396          (v) prewritten computer software, regardless of the manner in which the prewritten
             1397      computer software is transferred.
             1398          (c) "Tangible personal property" includes the following regardless of whether the item
             1399      is attached to real property:
             1400          (i) a dishwasher;
             1401          (ii) a dryer;
             1402          (iii) a freezer;
             1403          (iv) a microwave;
             1404          (v) a refrigerator;
             1405          (vi) a stove;
             1406          (vii) a washer; or
             1407          (viii) an item similar to Subsections [(113)] (115)(c)(i) through (vii) as determined by
             1408      the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1409      Rulemaking Act.
             1410          (d) "Tangible personal property" does not include a product that is transferred
             1411      electronically.
             1412          (e) "Tangible personal property" does not include the following if attached to real
             1413      property, regardless of whether the attachment to real property is only through a line that
             1414      supplies water, electricity, gas, telephone, cable, or supplies a similar item as determined by the
             1415      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1416      Rulemaking Act:
             1417          (i) a hot water heater;
             1418          (ii) a water filtration system; or
             1419          (iii) a water softener system.
             1420          [(114)] (116) "Tar sands" means impregnated sands that yield mixtures of liquid
             1421      hydrocarbon and require further processing other than mechanical blending before becoming
             1422      finished petroleum products.


             1423          [(115)] (117) (a) "Telecommunications enabling or facilitating equipment, machinery,
             1424      or software" means an item listed in Subsection [(115)] (117)(b) if that item is purchased or
             1425      leased primarily to enable or facilitate one or more of the following to function:
             1426          (i) telecommunications switching or routing equipment, machinery, or software; or
             1427          (ii) telecommunications transmission equipment, machinery, or software.
             1428          (b) The following apply to Subsection [(115)] (117)(a):
             1429          (i) a pole;
             1430          (ii) software;
             1431          (iii) a supplementary power supply;
             1432          (iv) temperature or environmental equipment or machinery;
             1433          (v) test equipment;
             1434          (vi) a tower; or
             1435          (vii) equipment, machinery, or software that functions similarly to an item listed in
             1436      Subsections [(115)] (117)(b)(i) through (vi) as determined by the commission by rule made in
             1437      accordance with Subsection [(115)] (117)(c).
             1438          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1439      commission may by rule define what constitutes equipment, machinery, or software that
             1440      functions similarly to an item listed in Subsections [(115)] (117)(b)(i) through (vi).
             1441          [(116)] (118) "Telecommunications equipment, machinery, or software required for
             1442      911 service" means equipment, machinery, or software that is required to comply with 47
             1443      C.F.R. Sec. 20.18.
             1444          [(117)] (119) "Telecommunications maintenance or repair equipment, machinery, or
             1445      software" means equipment, machinery, or software purchased or leased primarily to maintain
             1446      or repair one or more of the following, regardless of whether the equipment, machinery, or
             1447      software is purchased or leased as a spare part or as an upgrade or modification to one or more
             1448      of the following:
             1449          (a) telecommunications enabling or facilitating equipment, machinery, or software;
             1450          (b) telecommunications switching or routing equipment, machinery, or software; or
             1451          (c) telecommunications transmission equipment, machinery, or software.
             1452          [(118)] (120) (a) "Telecommunications service" means the electronic conveyance,
             1453      routing, or transmission of audio, data, video, voice, or any other information or signal to a


             1454      point, or among or between points.
             1455          (b) "Telecommunications service" includes:
             1456          (i) an electronic conveyance, routing, or transmission with respect to which a computer
             1457      processing application is used to act:
             1458          (A) on the code, form, or protocol of the content;
             1459          (B) for the purpose of electronic conveyance, routing, or transmission; and
             1460          (C) regardless of whether the service:
             1461          (I) is referred to as voice over Internet protocol service; or
             1462          (II) is classified by the Federal Communications Commission as enhanced or value
             1463      added;
             1464          (ii) an 800 service;
             1465          (iii) a 900 service;
             1466          (iv) a fixed wireless service;
             1467          (v) a mobile wireless service;
             1468          (vi) a postpaid calling service;
             1469          (vii) a prepaid calling service;
             1470          (viii) a prepaid wireless calling service; or
             1471          (ix) a private communications service.
             1472          (c) "Telecommunications service" does not include:
             1473          (i) advertising, including directory advertising;
             1474          (ii) an ancillary service;
             1475          (iii) a billing and collection service provided to a third party;
             1476          (iv) a data processing and information service if:
             1477          (A) the data processing and information service allows data to be:
             1478          (I) (Aa) acquired;
             1479          (Bb) generated;
             1480          (Cc) processed;
             1481          (Dd) retrieved; or
             1482          (Ee) stored; and
             1483          (II) delivered by an electronic transmission to a purchaser; and
             1484          (B) the purchaser's primary purpose for the underlying transaction is the processed data


             1485      or information;
             1486          (v) installation or maintenance of the following on a customer's premises:
             1487          (A) equipment; or
             1488          (B) wiring;
             1489          (vi) Internet access service;
             1490          (vii) a paging service;
             1491          (viii) a product transferred electronically, including:
             1492          (A) music;
             1493          (B) reading material;
             1494          (C) a ring tone;
             1495          (D) software; or
             1496          (E) video;
             1497          (ix) a radio and television audio and video programming service:
             1498          (A) regardless of the medium; and
             1499          (B) including:
             1500          (I) furnishing conveyance, routing, or transmission of a television audio and video
             1501      programming service by a programming service provider;
             1502          (II) cable service as defined in 47 U.S.C. Sec. 522(6); or
             1503          (III) audio and video programming services delivered by a commercial mobile radio
             1504      service provider as defined in 47 C.F.R. Sec. 20.3;
             1505          (x) a value-added nonvoice data service; or
             1506          (xi) tangible personal property.
             1507          [(119)] (121) (a) "Telecommunications service provider" means a person that:
             1508          (i) owns, controls, operates, or manages a telecommunications service; and
             1509          (ii) engages in an activity described in Subsection [(119)] (121)(a)(i) for the shared use
             1510      with or resale to any person of the telecommunications service.
             1511          (b) A person described in Subsection [(119)] (121)(a) is a telecommunications service
             1512      provider whether or not the Public Service Commission of Utah regulates:
             1513          (i) that person; or
             1514          (ii) the telecommunications service that the person owns, controls, operates, or
             1515      manages.


             1516          [(120)] (122) (a) "Telecommunications switching or routing equipment, machinery, or
             1517      software" means an item listed in Subsection [(120)] (122)(b) if that item is purchased or
             1518      leased primarily for switching or routing:
             1519          (i) an ancillary service;
             1520          (ii) data communications;
             1521          (iii) voice communications; or
             1522          (iv) telecommunications service.
             1523          (b) The following apply to Subsection [(120)] (122)(a):
             1524          (i) a bridge;
             1525          (ii) a computer;
             1526          (iii) a cross connect;
             1527          (iv) a modem;
             1528          (v) a multiplexer;
             1529          (vi) plug in circuitry;
             1530          (vii) a router;
             1531          (viii) software;
             1532          (ix) a switch; or
             1533          (x) equipment, machinery, or software that functions similarly to an item listed in
             1534      Subsections [(120)] (122)(b)(i) through (ix) as determined by the commission by rule made in
             1535      accordance with Subsection [(120)] (122)(c).
             1536          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1537      commission may by rule define what constitutes equipment, machinery, or software that
             1538      functions similarly to an item listed in Subsections [(120)] (122)(b)(i) through (ix).
             1539          [(121)] (123) (a) "Telecommunications transmission equipment, machinery, or
             1540      software" means an item listed in Subsection [(121)] (123)(b) if that item is purchased or
             1541      leased primarily for sending, receiving, or transporting:
             1542          (i) an ancillary service;
             1543          (ii) data communications;
             1544          (iii) voice communications; or
             1545          (iv) telecommunications service.
             1546          (b) The following apply to Subsection [(121)] (123)(a):


             1547          (i) an amplifier;
             1548          (ii) a cable;
             1549          (iii) a closure;
             1550          (iv) a conduit;
             1551          (v) a controller;
             1552          (vi) a duplexer;
             1553          (vii) a filter;
             1554          (viii) an input device;
             1555          (ix) an input/output device;
             1556          (x) an insulator;
             1557          (xi) microwave machinery or equipment;
             1558          (xii) an oscillator;
             1559          (xiii) an output device;
             1560          (xiv) a pedestal;
             1561          (xv) a power converter;
             1562          (xvi) a power supply;
             1563          (xvii) a radio channel;
             1564          (xviii) a radio receiver;
             1565          (xix) a radio transmitter;
             1566          (xx) a repeater;
             1567          (xxi) software;
             1568          (xxii) a terminal;
             1569          (xxiii) a timing unit;
             1570          (xxiv) a transformer;
             1571          (xxv) a wire; or
             1572          (xxvi) equipment, machinery, or software that functions similarly to an item listed in
             1573      Subsections [(121)] (123)(b)(i) through (xxv) as determined by the commission by rule made in
             1574      accordance with Subsection [(121)] (123)(c).
             1575          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1576      commission may by rule define what constitutes equipment, machinery, or software that
             1577      functions similarly to an item listed in Subsections [(121)] (123)(b)(i) through (xxv).


             1578          [(122)] (124) (a) "Textbook for a higher education course" means a textbook or other
             1579      printed material that is required for a course:
             1580          (i) offered by an institution of higher education; and
             1581          (ii) that the purchaser of the textbook or other printed material attends or will attend.
             1582          (b) "Textbook for a higher education course" includes a textbook in electronic format.
             1583          [(123)] (125) "Tobacco" means:
             1584          (a) a cigarette;
             1585          (b) a cigar;
             1586          (c) chewing tobacco;
             1587          (d) pipe tobacco; or
             1588          (e) any other item that contains tobacco.
             1589          [(124)] (126) "Unassisted amusement device" means an amusement device, skill
             1590      device, or ride device that is started and stopped by the purchaser or renter of the right to use or
             1591      operate the amusement device, skill device, or ride device.
             1592          [(125)] (127) (a) "Use" means the exercise of any right or power over tangible personal
             1593      property, a product transferred electronically, or a service under Subsection 59-12-103 (1),
             1594      incident to the ownership or the leasing of that tangible personal property, product transferred
             1595      electronically, or service.
             1596          (b) "Use" does not include the sale, display, demonstration, or trial of tangible personal
             1597      property, a product transferred electronically, or a service in the regular course of business and
             1598      held for resale.
             1599          [(126)] (128) "Value-added nonvoice data service" means a service:
             1600          (a) that otherwise meets the definition of a telecommunications service except that a
             1601      computer processing application is used to act primarily for a purpose other than conveyance,
             1602      routing, or transmission; and
             1603          (b) with respect to which a computer processing application is used to act on data or
             1604      information:
             1605          (i) code;
             1606          (ii) content;
             1607          (iii) form; or
             1608          (iv) protocol.


             1609          [(127)] (129) (a) Subject to Subsection [(127)] (129)(b), "vehicle" means the following
             1610      that are required to be titled, registered, or titled and registered:
             1611          (i) an aircraft as defined in Section 72-10-102 ;
             1612          (ii) a vehicle as defined in Section 41-1a-102 ;
             1613          (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
             1614          (iv) a vessel as defined in Section 41-1a-102 .
             1615          (b) For purposes of Subsection 59-12-104 (33) only, "vehicle" includes:
             1616          (i) a vehicle described in Subsection [(127)] (129)(a); or
             1617          (ii) (A) a locomotive;
             1618          (B) a freight car;
             1619          (C) railroad work equipment; or
             1620          (D) other railroad rolling stock.
             1621          [(128)] (130) "Vehicle dealer" means a person engaged in the business of buying,
             1622      selling, or exchanging a vehicle as defined in Subsection [(127)] (129).
             1623          [(129)] (131) (a) "Vertical service" means an ancillary service that:
             1624          (i) is offered in connection with one or more telecommunications services; and
             1625          (ii) offers an advanced calling feature that allows a customer to:
             1626          (A) identify a caller; and
             1627          (B) manage multiple calls and call connections.
             1628          (b) "Vertical service" includes an ancillary service that allows a customer to manage a
             1629      conference bridging service.
             1630          [(130)] (132) (a) "Voice mail service" means an ancillary service that enables a
             1631      customer to receive, send, or store a recorded message.
             1632          (b) "Voice mail service" does not include a vertical service that a customer is required
             1633      to have in order to utilize a voice mail service.
             1634          [(131)] (133) (a) Except as provided in Subsection [(131)] (133)(b), "waste energy
             1635      facility" means a facility that generates electricity:
             1636          (i) using as the primary source of energy waste materials that would be placed in a
             1637      landfill or refuse pit if it were not used to generate electricity, including:
             1638          (A) tires;
             1639          (B) waste coal; or


             1640          (C) oil shale; and
             1641          (ii) in amounts greater than actually required for the operation of the facility.
             1642          (b) "Waste energy facility" does not include a facility that incinerates:
             1643          (i) municipal solid waste;
             1644          (ii) hospital waste as defined in 40 C.F.R. 60.51c; or
             1645          (iii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
             1646          [(132)] (134) "Watercraft" means a vessel as defined in Section 73-18-2 .
             1647          [(133)] (135) "Wind energy" means wind used as the sole source of energy to produce
             1648      electricity.
             1649          [(134)] (136) "ZIP Code" means a Zoning Improvement Plan Code assigned to a
             1650      geographic location by the United States Postal Service.
             1651          Section 4. Section 59-12-104 is amended to read:
             1652           59-12-104. Exemptions.
             1653          The following sales and uses are exempt from the taxes imposed by this chapter:
             1654          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             1655      under Chapter 13, Motor and Special Fuel Tax Act;
             1656          (2) subject to Section 59-12-104.6 , sales to the state, its institutions, and its political
             1657      subdivisions; however, this exemption does not apply to sales of:
             1658          (a) construction materials except:
             1659          (i) construction materials purchased by or on behalf of institutions of the public
             1660      education system as defined in Utah Constitution Article X, Section 2, provided the
             1661      construction materials are clearly identified and segregated and installed or converted to real
             1662      property which is owned by institutions of the public education system; and
             1663          (ii) construction materials purchased by the state, its institutions, or its political
             1664      subdivisions which are installed or converted to real property by employees of the state, its
             1665      institutions, or its political subdivisions; or
             1666          (b) tangible personal property in connection with the construction, operation,
             1667      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             1668      providing additional project capacity, as defined in Section 11-13-103 ;
             1669          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             1670          (i) the proceeds of each sale do not exceed $1; and


             1671          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             1672      the cost of the item described in Subsection (3)(b) as goods consumed; and
             1673          (b) Subsection (3)(a) applies to:
             1674          (i) food and food ingredients; or
             1675          (ii) prepared food;
             1676          (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
             1677          (i) alcoholic beverages;
             1678          (ii) food and food ingredients; or
             1679          (iii) prepared food;
             1680          (b) sales of tangible personal property or a product transferred electronically:
             1681          (i) to a passenger;
             1682          (ii) by a commercial airline carrier; and
             1683          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
             1684          (c) services related to Subsection (4)(a) or (b);
             1685          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
             1686      and equipment:
             1687          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
             1688      North American Industry Classification System of the federal Executive Office of the
             1689      President, Office of Management and Budget; and
             1690          (II) for:
             1691          (Aa) installation in an aircraft, including services relating to the installation of parts or
             1692      equipment in the aircraft;
             1693          (Bb) renovation of an aircraft; or
             1694          (Cc) repair of an aircraft; or
             1695          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
             1696      commerce; or
             1697          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
             1698      aircraft operated by a common carrier in interstate or foreign commerce; and
             1699          (b) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             1700      a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
             1701      refund:


             1702          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
             1703          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
             1704          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
             1705      the sale prior to filing for the refund;
             1706          (iv) for sales and use taxes paid under this chapter on the sale;
             1707          (v) in accordance with Section 59-1-1410 ; and
             1708          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             1709      the person files for the refund on or before September 30, 2011;
             1710          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             1711      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             1712      exhibitor, distributor, or commercial television or radio broadcaster;
             1713          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             1714      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             1715      washing of tangible personal property;
             1716          (b) if a seller that sells at the same business location assisted cleaning or washing of
             1717      tangible personal property and cleaning or washing of tangible personal property that is not
             1718      assisted cleaning or washing of tangible personal property, the exemption described in
             1719      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             1720      or washing of the tangible personal property; and
             1721          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
             1722      Utah Administrative Rulemaking Act, the commission may make rules:
             1723          (i) governing the circumstances under which sales are at the same business location;
             1724      and
             1725          (ii) establishing the procedures and requirements for a seller to separately account for
             1726      sales of assisted cleaning or washing of tangible personal property;
             1727          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             1728      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             1729      fulfilled;
             1730          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             1731      this state if the vehicle is:
             1732          (a) not registered in this state; and


             1733          (b) (i) not used in this state; or
             1734          (ii) used in this state:
             1735          (A) if the vehicle is not used to conduct business, for a time period that does not
             1736      exceed the longer of:
             1737          (I) 30 days in any calendar year; or
             1738          (II) the time period necessary to transport the vehicle to the borders of this state; or
             1739          (B) if the vehicle is used to conduct business, for the time period necessary to transport
             1740      the vehicle to the borders of this state;
             1741          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             1742          (i) the item is intended for human use; and
             1743          (ii) (A) a prescription was issued for the item; or
             1744          (B) the item was purchased by a hospital or other medical facility; and
             1745          (b) (i) Subsection (10)(a) applies to:
             1746          (A) a drug;
             1747          (B) a syringe; or
             1748          (C) a stoma supply; and
             1749          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1750      commission may by rule define the terms:
             1751          (A) "syringe"; or
             1752          (B) "stoma supply";
             1753          (11) sales or use of property, materials, or services used in the construction of or
             1754      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             1755          (12) (a) sales of an item described in Subsection (12)(c) served by:
             1756          (i) the following if the item described in Subsection (12)(c) is not available to the
             1757      general public:
             1758          (A) a church; or
             1759          (B) a charitable institution;
             1760          (ii) an institution of higher education if:
             1761          (A) the item described in Subsection (12)(c) is not available to the general public; or
             1762          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             1763      offered by the institution of higher education; or


             1764          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             1765          (i) a medical facility; or
             1766          (ii) a nursing facility; and
             1767          (c) Subsections (12)(a) and (b) apply to:
             1768          (i) food and food ingredients;
             1769          (ii) prepared food; or
             1770          (iii) alcoholic beverages;
             1771          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             1772      or a product transferred electronically by a person:
             1773          (i) regardless of the number of transactions involving the sale of that tangible personal
             1774      property or product transferred electronically by that person; and
             1775          (ii) not regularly engaged in the business of selling that type of tangible personal
             1776      property or product transferred electronically;
             1777          (b) this Subsection (13) does not apply if:
             1778          (i) the sale is one of a series of sales of a character to indicate that the person is
             1779      regularly engaged in the business of selling that type of tangible personal property or product
             1780      transferred electronically;
             1781          (ii) the person holds that person out as regularly engaged in the business of selling that
             1782      type of tangible personal property or product transferred electronically;
             1783          (iii) the person sells an item of tangible personal property or product transferred
             1784      electronically that the person purchased as a sale that is exempt under Subsection (25); or
             1785          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             1786      this state in which case the tax is based upon:
             1787          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             1788      sold; or
             1789          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             1790      value of the vehicle or vessel being sold at the time of the sale as determined by the
             1791      commission; and
             1792          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1793      commission shall make rules establishing the circumstances under which:
             1794          (i) a person is regularly engaged in the business of selling a type of tangible personal


             1795      property or product transferred electronically;
             1796          (ii) a sale of tangible personal property or a product transferred electronically is one of
             1797      a series of sales of a character to indicate that a person is regularly engaged in the business of
             1798      selling that type of tangible personal property or product transferred electronically; or
             1799          (iii) a person holds that person out as regularly engaged in the business of selling a type
             1800      of tangible personal property or product transferred electronically;
             1801          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             1802      July 1, 2006, for a purchase or lease by a manufacturing facility except for a cogeneration
             1803      facility, of the following:
             1804          (i) machinery and equipment that:
             1805          (A) are used:
             1806          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             1807      recycler described in Subsection 59-12-102 [(55)](57)(b):
             1808          (Aa) in the manufacturing process;
             1809          (Bb) to manufacture an item sold as tangible personal property; and
             1810          (Cc) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             1811      (14)(a)(i)(A)(I) in the state; or
             1812          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             1813      59-12-102 [(55)](57)(b):
             1814          (Aa) to process an item sold as tangible personal property; and
             1815          (Bb) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             1816      (14)(a)(i)(A)(II) in the state; and
             1817          (B) have an economic life of three or more years; and
             1818          (ii) normal operating repair or replacement parts that:
             1819          (A) have an economic life of three or more years; and
             1820          (B) are used:
             1821          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             1822      recycler described in Subsection 59-12-102 [(55)](57)(b):
             1823          (Aa) in the manufacturing process; and
             1824          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(I) in the
             1825      state; or


             1826          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             1827      59-12-102 [(55)](57)(b):
             1828          (Aa) to process an item sold as tangible personal property; and
             1829          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(II) in the
             1830      state;
             1831          (b) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             1832      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             1833      of the following:
             1834          (i) machinery and equipment that:
             1835          (A) are used:
             1836          (I) in the manufacturing process;
             1837          (II) to manufacture an item sold as tangible personal property; and
             1838          (III) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             1839      (14)(b) in the state; and
             1840          (B) have an economic life of three or more years; and
             1841          (ii) normal operating repair or replacement parts that:
             1842          (A) are used:
             1843          (I) in the manufacturing process; and
             1844          (II) in a manufacturing facility described in this Subsection (14)(b) in the state; and
             1845          (B) have an economic life of three or more years;
             1846          (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
             1847      by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
             1848      NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
             1849      Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
             1850      of the 2002 North American Industry Classification System of the federal Executive Office of
             1851      the President, Office of Management and Budget, of the following:
             1852          (i) machinery and equipment that:
             1853          (A) are used:
             1854          (I) (Aa) in the production process, other than the production of real property; or
             1855          (Bb) in research and development; and
             1856          (II) beginning on July 1, 2009, in an establishment described in this Subsection (14)(c)


             1857      in the state; and
             1858          (B) have an economic life of three or more years; and
             1859          (ii) normal operating repair or replacement parts that:
             1860          (A) have an economic life of three or more years; and
             1861          (B) are used in:
             1862          (I) (Aa) the production process, except for the production of real property; and
             1863          (Bb) an establishment described in this Subsection (14)(c) in the state; or
             1864          (II) (Aa) research and development; and
             1865          (Bb) in an establishment described in this Subsection (14)(c) in the state;
             1866          (d) (i) amounts paid or charged for a purchase or lease made on or after July 1, 2010,
             1867      but on or before June 30, 2014, by an establishment described in NAICS Code 518112, Web
             1868      Search Portals, of the 2002 North American Industry Classification System of the federal
             1869      Executive Office of the President, Office of Management and Budget, of the following:
             1870          (A) machinery and equipment that:
             1871          (I) are used in the operation of the web search portal;
             1872          (II) have an economic life of three or more years; and
             1873          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             1874      in the state; and
             1875          (B) normal operating repair or replacement parts that:
             1876          (I) are used in the operation of the web search portal;
             1877          (II) have an economic life of three or more years; and
             1878          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             1879      in the state; or
             1880          (ii) amounts paid or charged for a purchase or lease made on or after July 1, 2014, by
             1881      an establishment described in NAICS Code 518112, Web Search Portals, of the 2002 North
             1882      American Industry Classification System of the federal Executive Office of the President,
             1883      Office of Management and Budget, of the following:
             1884          (A) machinery and equipment that:
             1885          (I) are used in the operation of the web search portal; and
             1886          (II) have an economic life of three or more years; and
             1887          (B) normal operating repair or replacement parts that:


             1888          (I) are used in the operation of the web search portal; and
             1889          (II) have an economic life of three or more years;
             1890          (e) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
             1891      Utah Administrative Rulemaking Act, the commission:
             1892          (i) shall by rule define the term "establishment"; and
             1893          (ii) may by rule define what constitutes:
             1894          (A) processing an item sold as tangible personal property;
             1895          (B) the production process, except for the production of real property;
             1896          (C) research and development; or
             1897          (D) a new or expanding establishment described in Subsection (14)(d) in the state; and
             1898          (f) on or before October 1, 2011, and every five years after October 1, 2011, the
             1899      commission shall:
             1900          (i) review the exemptions described in this Subsection (14) and make
             1901      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             1902      exemptions should be continued, modified, or repealed; and
             1903          (ii) include in its report:
             1904          (A) an estimate of the cost of the exemptions;
             1905          (B) the purpose and effectiveness of the exemptions; and
             1906          (C) the benefits of the exemptions to the state;
             1907          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             1908          (i) tooling;
             1909          (ii) special tooling;
             1910          (iii) support equipment;
             1911          (iv) special test equipment; or
             1912          (v) parts used in the repairs or renovations of tooling or equipment described in
             1913      Subsections (15)(a)(i) through (iv); and
             1914          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             1915          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             1916      performance of any aerospace or electronics industry contract with the United States
             1917      government or any subcontract under that contract; and
             1918          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),


             1919      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             1920      by:
             1921          (A) a government identification tag placed on the tooling, equipment, or parts; or
             1922          (B) listing on a government-approved property record if placing a government
             1923      identification tag on the tooling, equipment, or parts is impractical;
             1924          (16) sales of newspapers or newspaper subscriptions;
             1925          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
             1926      product transferred electronically traded in as full or part payment of the purchase price, except
             1927      that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
             1928      trade-ins are limited to other vehicles only, and the tax is based upon:
             1929          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             1930      vehicle being traded in; or
             1931          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             1932      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             1933      commission; and
             1934          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             1935      following items of tangible personal property or products transferred electronically traded in as
             1936      full or part payment of the purchase price:
             1937          (i) money;
             1938          (ii) electricity;
             1939          (iii) water;
             1940          (iv) gas; or
             1941          (v) steam;
             1942          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             1943      or a product transferred electronically used or consumed primarily and directly in farming
             1944      operations, regardless of whether the tangible personal property or product transferred
             1945      electronically:
             1946          (A) becomes part of real estate; or
             1947          (B) is installed by a:
             1948          (I) farmer;
             1949          (II) contractor; or


             1950          (III) subcontractor; or
             1951          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
             1952      product transferred electronically if the tangible personal property or product transferred
             1953      electronically is exempt under Subsection (18)(a)(i); and
             1954          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following are
             1955      subject to the taxes imposed by this chapter:
             1956          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
             1957      incidental to farming:
             1958          (I) machinery;
             1959          (II) equipment;
             1960          (III) materials; or
             1961          (IV) supplies; and
             1962          (B) tangible personal property that is considered to be used in a manner that is
             1963      incidental to farming includes:
             1964          (I) hand tools; or
             1965          (II) maintenance and janitorial equipment and supplies;
             1966          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
             1967      transferred electronically if the tangible personal property or product transferred electronically
             1968      is used in an activity other than farming; and
             1969          (B) tangible personal property or a product transferred electronically that is considered
             1970      to be used in an activity other than farming includes:
             1971          (I) office equipment and supplies; or
             1972          (II) equipment and supplies used in:
             1973          (Aa) the sale or distribution of farm products;
             1974          (Bb) research; or
             1975          (Cc) transportation; or
             1976          (iii) a vehicle required to be registered by the laws of this state during the period
             1977      ending two years after the date of the vehicle's purchase;
             1978          (19) sales of hay;
             1979          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             1980      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or


             1981      garden, farm, or other agricultural produce is sold by:
             1982          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             1983      agricultural produce;
             1984          (b) an employee of the producer described in Subsection (20)(a); or
             1985          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             1986          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             1987      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             1988          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             1989      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             1990      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             1991      manufacturer, processor, wholesaler, or retailer;
             1992          (23) a product stored in the state for resale;
             1993          (24) (a) purchases of a product if:
             1994          (i) the product is:
             1995          (A) purchased outside of this state;
             1996          (B) brought into this state:
             1997          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             1998          (II) by a nonresident person who is not living or working in this state at the time of the
             1999      purchase;
             2000          (C) used for the personal use or enjoyment of the nonresident person described in
             2001      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             2002          (D) not used in conducting business in this state; and
             2003          (ii) for:
             2004          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
             2005      the product for a purpose for which the product is designed occurs outside of this state;
             2006          (B) a boat, the boat is registered outside of this state; or
             2007          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             2008      outside of this state;
             2009          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             2010          (i) a lease or rental of a product; or
             2011          (ii) a sale of a vehicle exempt under Subsection (33); and


             2012          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             2013      purposes of Subsection (24)(a), the commission may by rule define what constitutes the
             2014      following:
             2015          (i) conducting business in this state if that phrase has the same meaning in this
             2016      Subsection (24) as in Subsection (63);
             2017          (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
             2018      as in Subsection (63); or
             2019          (iii) a purpose for which a product is designed if that phrase has the same meaning in
             2020      this Subsection (24) as in Subsection (63);
             2021          (25) a product purchased for resale in this state, in the regular course of business, either
             2022      in its original form or as an ingredient or component part of a manufactured or compounded
             2023      product;
             2024          (26) a product upon which a sales or use tax was paid to some other state, or one of its
             2025      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             2026      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             2027      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             2028      Act;
             2029          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             2030      person for use in compounding a service taxable under the subsections;
             2031          (28) purchases made in accordance with the special supplemental nutrition program for
             2032      women, infants, and children established in 42 U.S.C. Sec. 1786;
             2033          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             2034      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             2035      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             2036      Manual of the federal Executive Office of the President, Office of Management and Budget;
             2037          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             2038      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
             2039          (a) not registered in this state; and
             2040          (b) (i) not used in this state; or
             2041          (ii) used in this state:
             2042          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a


             2043      time period that does not exceed the longer of:
             2044          (I) 30 days in any calendar year; or
             2045          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             2046      the borders of this state; or
             2047          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             2048      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             2049      state;
             2050          (31) sales of aircraft manufactured in Utah;
             2051          (32) amounts paid for the purchase of telecommunications service for purposes of
             2052      providing telecommunications service;
             2053          (33) sales, leases, or uses of the following:
             2054          (a) a vehicle by an authorized carrier; or
             2055          (b) tangible personal property that is installed on a vehicle:
             2056          (i) sold or leased to or used by an authorized carrier; and
             2057          (ii) before the vehicle is placed in service for the first time;
             2058          (34) (a) 45% of the sales price of any new manufactured home; and
             2059          (b) 100% of the sales price of any used manufactured home;
             2060          (35) sales relating to schools and fundraising sales;
             2061          (36) sales or rentals of durable medical equipment if:
             2062          (a) a person presents a prescription for the durable medical equipment; and
             2063          (b) the durable medical equipment is used for home use only;
             2064          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             2065      Section 72-11-102 ; and
             2066          (b) the commission shall by rule determine the method for calculating sales exempt
             2067      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             2068          (38) sales to a ski resort of:
             2069          (a) snowmaking equipment;
             2070          (b) ski slope grooming equipment;
             2071          (c) passenger ropeways as defined in Section 72-11-102 ; or
             2072          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             2073      described in Subsections (38)(a) through (c);


             2074          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             2075          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             2076      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             2077      59-12-102 ;
             2078          (b) if a seller that sells or rents at the same business location the right to use or operate
             2079      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             2080      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             2081      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             2082      amusement, entertainment, or recreation for the assisted amusement devices; and
             2083          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
             2084      Utah Administrative Rulemaking Act, the commission may make rules:
             2085          (i) governing the circumstances under which sales are at the same business location;
             2086      and
             2087          (ii) establishing the procedures and requirements for a seller to separately account for
             2088      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
             2089      assisted amusement devices;
             2090          (41) (a) sales of photocopies by:
             2091          (i) a governmental entity; or
             2092          (ii) an entity within the state system of public education, including:
             2093          (A) a school; or
             2094          (B) the State Board of Education; or
             2095          (b) sales of publications by a governmental entity;
             2096          (42) amounts paid for admission to an athletic event at an institution of higher
             2097      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             2098      20 U.S.C. Sec. 1681 et seq.;
             2099          (43) (a) sales made to or by:
             2100          (i) an area agency on aging; or
             2101          (ii) a senior citizen center owned by a county, city, or town; or
             2102          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             2103          (44) sales or leases of semiconductor fabricating, processing, research, or development
             2104      materials regardless of whether the semiconductor fabricating, processing, research, or


             2105      development materials:
             2106          (a) actually come into contact with a semiconductor; or
             2107          (b) ultimately become incorporated into real property;
             2108          (45) an amount paid by or charged to a purchaser for accommodations and services
             2109      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             2110      59-12-104.2 ;
             2111          (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             2112      sports event registration certificate in accordance with Section 41-3-306 for the event period
             2113      specified on the temporary sports event registration certificate;
             2114          (47) sales or uses of electricity, if the sales or uses are:
             2115          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             2116      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             2117      source, as designated in the tariff by the Public Service Commission of Utah; and
             2118          (b) for an amount of electricity that is:
             2119          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             2120      under the tariff described in Subsection (47)(a); and
             2121          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             2122      Subsection (47)(a) that may be purchased under the tariff described in Subsection (47)(a);
             2123          (48) sales or rentals of mobility enhancing equipment if a person presents a
             2124      prescription for the mobility enhancing equipment;
             2125          (49) sales of water in a:
             2126          (a) pipe;
             2127          (b) conduit;
             2128          (c) ditch; or
             2129          (d) reservoir;
             2130          (50) sales of currency or coinage that constitute legal tender of the United States or of a
             2131      foreign nation;
             2132          (51) (a) sales of an item described in Subsection (51)(b) if the item:
             2133          (i) does not constitute legal tender of any nation; and
             2134          (ii) has a gold, silver, or platinum content of 80% or more; and
             2135          (b) Subsection (51)(a) applies to a gold, silver, or platinum:


             2136          (i) ingot;
             2137          (ii) bar;
             2138          (iii) medallion; or
             2139          (iv) decorative coin;
             2140          (52) amounts paid on a sale-leaseback transaction;
             2141          (53) sales of a prosthetic device:
             2142          (a) for use on or in a human; and
             2143          (b) (i) for which a prescription is required; or
             2144          (ii) if the prosthetic device is purchased by a hospital or other medical facility;
             2145          (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
             2146      machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
             2147      or equipment is primarily used in the production or postproduction of the following media for
             2148      commercial distribution:
             2149          (i) a motion picture;
             2150          (ii) a television program;
             2151          (iii) a movie made for television;
             2152          (iv) a music video;
             2153          (v) a commercial;
             2154          (vi) a documentary; or
             2155          (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
             2156      commission by administrative rule made in accordance with Subsection (54)(d); or
             2157          (b) notwithstanding Subsection (54)(a), purchases, leases, or rentals of machinery or
             2158      equipment by an establishment described in Subsection (54)(c) that is used for the production
             2159      or postproduction of the following are subject to the taxes imposed by this chapter:
             2160          (i) a live musical performance;
             2161          (ii) a live news program; or
             2162          (iii) a live sporting event;
             2163          (c) the following establishments listed in the 1997 North American Industry
             2164      Classification System of the federal Executive Office of the President, Office of Management
             2165      and Budget, apply to Subsections (54)(a) and (b):
             2166          (i) NAICS Code 512110; or


             2167          (ii) NAICS Code 51219; and
             2168          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2169      commission may by rule:
             2170          (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
             2171      or
             2172          (ii) define:
             2173          (A) "commercial distribution";
             2174          (B) "live musical performance";
             2175          (C) "live news program"; or
             2176          (D) "live sporting event";
             2177          (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             2178      on or before June 30, 2019, of machinery or equipment that:
             2179          (i) is leased or purchased for or by a facility that:
             2180          (A) is a renewable energy production facility;
             2181          (B) is located in the state; and
             2182          (C) (I) becomes operational on or after July 1, 2004; or
             2183          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             2184      2004, as a result of the use of the machinery or equipment;
             2185          (ii) has an economic life of five or more years; and
             2186          (iii) is used to make the facility or the increase in capacity of the facility described in
             2187      Subsection (55)(a)(i) operational up to the point of interconnection with an existing
             2188      transmission grid including:
             2189          (A) a wind turbine;
             2190          (B) generating equipment;
             2191          (C) a control and monitoring system;
             2192          (D) a power line;
             2193          (E) substation equipment;
             2194          (F) lighting;
             2195          (G) fencing;
             2196          (H) pipes; or
             2197          (I) other equipment used for locating a power line or pole; and


             2198          (b) this Subsection (55) does not apply to:
             2199          (i) machinery or equipment used in construction of:
             2200          (A) a new renewable energy production facility; or
             2201          (B) the increase in the capacity of a renewable energy production facility;
             2202          (ii) contracted services required for construction and routine maintenance activities;
             2203      and
             2204          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             2205      of the facility described in Subsection (55)(a)(i)(C)(II), machinery or equipment used or
             2206      acquired after:
             2207          (A) the renewable energy production facility described in Subsection (55)(a)(i) is
             2208      operational as described in Subsection (55)(a)(iii); or
             2209          (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
             2210      in Subsection (55)(a)(iii);
             2211          (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             2212      on or before June 30, 2019, of machinery or equipment that:
             2213          (i) is leased or purchased for or by a facility that:
             2214          (A) is a waste energy production facility;
             2215          (B) is located in the state; and
             2216          (C) (I) becomes operational on or after July 1, 2004; or
             2217          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             2218      2004, as a result of the use of the machinery or equipment;
             2219          (ii) has an economic life of five or more years; and
             2220          (iii) is used to make the facility or the increase in capacity of the facility described in
             2221      Subsection (56)(a)(i) operational up to the point of interconnection with an existing
             2222      transmission grid including:
             2223          (A) generating equipment;
             2224          (B) a control and monitoring system;
             2225          (C) a power line;
             2226          (D) substation equipment;
             2227          (E) lighting;
             2228          (F) fencing;


             2229          (G) pipes; or
             2230          (H) other equipment used for locating a power line or pole; and
             2231          (b) this Subsection (56) does not apply to:
             2232          (i) machinery or equipment used in construction of:
             2233          (A) a new waste energy facility; or
             2234          (B) the increase in the capacity of a waste energy facility;
             2235          (ii) contracted services required for construction and routine maintenance activities;
             2236      and
             2237          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             2238      described in Subsection (56)(a)(i)(C)(II), machinery or equipment used or acquired after:
             2239          (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
             2240      described in Subsection (56)(a)(iii); or
             2241          (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
             2242      in Subsection (56)(a)(iii);
             2243          (57) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             2244      or before June 30, 2019, of machinery or equipment that:
             2245          (i) is leased or purchased for or by a facility that:
             2246          (A) is located in the state;
             2247          (B) produces fuel from biomass energy including:
             2248          (I) methanol; or
             2249          (II) ethanol; and
             2250          (C) (I) becomes operational on or after July 1, 2004; or
             2251          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
             2252      a result of the installation of the machinery or equipment;
             2253          (ii) has an economic life of five or more years; and
             2254          (iii) is installed on the facility described in Subsection (57)(a)(i);
             2255          (b) this Subsection (57) does not apply to:
             2256          (i) machinery or equipment used in construction of:
             2257          (A) a new facility described in Subsection (57)(a)(i); or
             2258          (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
             2259          (ii) contracted services required for construction and routine maintenance activities;


             2260      and
             2261          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             2262      described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or acquired after:
             2263          (A) the facility described in Subsection (57)(a)(i) is operational; or
             2264          (B) the increased capacity described in Subsection (57)(a)(i) is operational;
             2265          (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
             2266      product transferred electronically to a person within this state if that tangible personal property
             2267      or product transferred electronically is subsequently shipped outside the state and incorporated
             2268      pursuant to contract into and becomes a part of real property located outside of this state;
             2269          (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
             2270      state or political entity to which the tangible personal property is shipped imposes a sales, use,
             2271      gross receipts, or other similar transaction excise tax on the transaction against which the other
             2272      state or political entity allows a credit for sales and use taxes imposed by this chapter; and
             2273          (c) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             2274      a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
             2275      refund:
             2276          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
             2277          (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
             2278      which the sale is made;
             2279          (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
             2280      sale prior to filing for the refund;
             2281          (iv) for sales and use taxes paid under this chapter on the sale;
             2282          (v) in accordance with Section 59-1-1410 ; and
             2283          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             2284      the person files for the refund on or before June 30, 2011;
             2285          (59) purchases:
             2286          (a) of one or more of the following items in printed or electronic format:
             2287          (i) a list containing information that includes one or more:
             2288          (A) names; or
             2289          (B) addresses; or
             2290          (ii) a database containing information that includes one or more:


             2291          (A) names; or
             2292          (B) addresses; and
             2293          (b) used to send direct mail;
             2294          (60) redemptions or repurchases of a product by a person if that product was:
             2295          (a) delivered to a pawnbroker as part of a pawn transaction; and
             2296          (b) redeemed or repurchased within the time period established in a written agreement
             2297      between the person and the pawnbroker for redeeming or repurchasing the product;
             2298          (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
             2299          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
             2300      and
             2301          (ii) has a useful economic life of one or more years; and
             2302          (b) the following apply to Subsection (61)(a):
             2303          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             2304          (ii) telecommunications equipment, machinery, or software required for 911 service;
             2305          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             2306          (iv) telecommunications switching or routing equipment, machinery, or software; or
             2307          (v) telecommunications transmission equipment, machinery, or software;
             2308          (62) (a) beginning on July 1, 2006, and ending on June 30, 2016, purchases of tangible
             2309      personal property or a product transferred electronically that are used in the research and
             2310      development of coal-to-liquids, oil shale, or tar sands technology; and
             2311          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2312      commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
             2313      purchases of tangible personal property or a product transferred electronically that are used in
             2314      the research and development of coal-to-liquids, oil shale, and tar sands technology;
             2315          (63) (a) purchases of tangible personal property or a product transferred electronically
             2316      if:
             2317          (i) the tangible personal property or product transferred electronically is:
             2318          (A) purchased outside of this state;
             2319          (B) brought into this state at any time after the purchase described in Subsection
             2320      (63)(a)(i)(A); and
             2321          (C) used in conducting business in this state; and


             2322          (ii) for:
             2323          (A) tangible personal property or a product transferred electronically other than the
             2324      tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
             2325      for a purpose for which the property is designed occurs outside of this state; or
             2326          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             2327      outside of this state;
             2328          (b) the exemption provided for in Subsection (63)(a) does not apply to:
             2329          (i) a lease or rental of tangible personal property or a product transferred electronically;
             2330      or
             2331          (ii) a sale of a vehicle exempt under Subsection (33); and
             2332          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             2333      purposes of Subsection (63)(a), the commission may by rule define what constitutes the
             2334      following:
             2335          (i) conducting business in this state if that phrase has the same meaning in this
             2336      Subsection (63) as in Subsection (24);
             2337          (ii) the first use of tangible personal property or a product transferred electronically if
             2338      that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
             2339          (iii) a purpose for which tangible personal property or a product transferred
             2340      electronically is designed if that phrase has the same meaning in this Subsection (63) as in
             2341      Subsection (24);
             2342          (64) sales of disposable home medical equipment or supplies if:
             2343          (a) a person presents a prescription for the disposable home medical equipment or
             2344      supplies;
             2345          (b) the disposable home medical equipment or supplies are used exclusively by the
             2346      person to whom the prescription described in Subsection (64)(a) is issued; and
             2347          (c) the disposable home medical equipment and supplies are listed as eligible for
             2348      payment under:
             2349          (i) Title XVIII, federal Social Security Act; or
             2350          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             2351          (65) sales:
             2352          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit


             2353      District Act; or
             2354          (b) of tangible personal property to a subcontractor of a public transit district, if the
             2355      tangible personal property is:
             2356          (i) clearly identified; and
             2357          (ii) installed or converted to real property owned by the public transit district;
             2358          (66) sales of construction materials:
             2359          (a) purchased on or after July 1, 2010;
             2360          (b) purchased by, on behalf of, or for the benefit of an international airport:
             2361          (i) located within a county of the first class; and
             2362          (ii) that has a United States customs office on its premises; and
             2363          (c) if the construction materials are:
             2364          (i) clearly identified;
             2365          (ii) segregated; and
             2366          (iii) installed or converted to real property:
             2367          (A) owned or operated by the international airport described in Subsection (66)(b); and
             2368          (B) located at the international airport described in Subsection (66)(b);
             2369          (67) sales of construction materials:
             2370          (a) purchased on or after July 1, 2008;
             2371          (b) purchased by, on behalf of, or for the benefit of a new airport:
             2372          (i) located within a county of the second class; and
             2373          (ii) that is owned or operated by a city in which an airline as defined in Section
             2374      59-2-102 is headquartered; and
             2375          (c) if the construction materials are:
             2376          (i) clearly identified;
             2377          (ii) segregated; and
             2378          (iii) installed or converted to real property:
             2379          (A) owned or operated by the new airport described in Subsection (67)(b);
             2380          (B) located at the new airport described in Subsection (67)(b); and
             2381          (C) as part of the construction of the new airport described in Subsection (67)(b);
             2382          (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
             2383          (69) purchases and sales described in Section 63H-4-111 ;


             2384          (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
             2385      overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
             2386      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             2387      lists a state or country other than this state as the location of registry of the fixed wing turbine
             2388      powered aircraft; or
             2389          (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
             2390      provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
             2391      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             2392      lists a state or country other than this state as the location of registry of the fixed wing turbine
             2393      powered aircraft;
             2394          (71) subject to Section 59-12-104.4 , sales of a textbook for a higher education course:
             2395          (a) to a person admitted to an institution of higher education; and
             2396          (b) by a seller, other than a bookstore owned by an institution of higher education, if
             2397      51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
             2398      textbook for a higher education course; [and]
             2399          (72) a license fee or tax a municipality imposes in accordance with Subsection
             2400      10-1-203 (5) on a purchaser from a business for which the municipality provides an enhanced
             2401      level of municipal services[.];
             2402          (73) amounts paid or charged for construction materials used in the construction of a
             2403      new or expanding life science research and development facility in the state, if the construction
             2404      materials are:
             2405          (a) clearly identified;
             2406          (b) segregated; and
             2407          (c) installed or converted to real property; and
             2408          (74) amounts paid or charged for:
             2409          (a) a purchase or lease of machinery and equipment that:
             2410          (i) are used in performing qualified research:
             2411          (A) as defined in Section 59-7-612 ;
             2412          (B) in the state; and
             2413          (C) with respect to which the purchaser pays or incurs a qualified research expense as
             2414      defined in Section 59-7-612 ; and


             2415          (ii) have an economic life of three or more years; and
             2416          (b) normal operating repair or replacement parts:
             2417          (i) for the machinery and equipment described in Subsection (74)(a); and
             2418          (ii) that have an economic life of three or more years.
             2419          Section 5. Effective date -- Retrospective operation.
             2420          (1) Except as provided in Subsection (2), this bill has retrospective operation for a
             2421      taxable year beginning on or after January 1, 2012.
             2422          (2) The amendments to Sections 59-12-102 and 59-12-104 take effect on July 1, 2012.




Legislative Review Note
    as of 2-16-12 4:05 PM


Office of Legislative Research and General Counsel


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