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S.B. 33 Enrolled

             1     

SALES AND USE TAX REVISIONS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Howard A. Stephenson

             5     
House Sponsor: Steve Eliason

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill enacts sales and use tax exemptions.
             10      Highlighted Provisions:
             11          This bill:
             12          .    enacts a sales and use tax exemption for certain sales or leases if the ownership of
             13      the seller and the ownership of the purchaser are identical or the ownership of the
             14      lessor and the ownership of the lessee are identical;
             15          .    enacts a sales and use tax exemption for certain purchases of machinery and
             16      equipment if a certain percentage of the purchaser's sales revenues are certain
             17      admission or user fees subject to sales and use taxation;
             18          .    grants rulemaking authority to the State Tax Commission;
             19          .    requires the State Tax Commission to report to the Revenue and Taxation Interim
             20      Committee; and
             21          .    makes technical and conforming changes.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          This bill takes effect on July 1, 2013.
             26      Utah Code Sections Affected:
             27      AMENDS:
             28          59-12-104, as last amended by Laws of Utah 2012, Chapters 255, 399, 405, and 410
             29     


             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 59-12-104 is amended to read:
             32           59-12-104. Exemptions.
             33          The following sales and uses are exempt from the taxes imposed by this chapter:
             34          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             35      under Chapter 13, Motor and Special Fuel Tax Act;
             36          (2) subject to Section 59-12-104.6 , sales to the state, its institutions, and its political
             37      subdivisions; however, this exemption does not apply to sales of:
             38          (a) construction materials except:
             39          (i) construction materials purchased by or on behalf of institutions of the public
             40      education system as defined in Utah Constitution Article X, Section 2, provided the
             41      construction materials are clearly identified and segregated and installed or converted to real
             42      property which is owned by institutions of the public education system; and
             43          (ii) construction materials purchased by the state, its institutions, or its political
             44      subdivisions which are installed or converted to real property by employees of the state, its
             45      institutions, or its political subdivisions; or
             46          (b) tangible personal property in connection with the construction, operation,
             47      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             48      providing additional project capacity, as defined in Section 11-13-103 ;
             49          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             50          (i) the proceeds of each sale do not exceed $1; and
             51          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             52      the cost of the item described in Subsection (3)(b) as goods consumed; and
             53          (b) Subsection (3)(a) applies to:
             54          (i) food and food ingredients; or
             55          (ii) prepared food;
             56          (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
             57          (i) alcoholic beverages;


             58          (ii) food and food ingredients; or
             59          (iii) prepared food;
             60          (b) sales of tangible personal property or a product transferred electronically:
             61          (i) to a passenger;
             62          (ii) by a commercial airline carrier; and
             63          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
             64          (c) services related to Subsection (4)(a) or (b);
             65          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
             66      and equipment:
             67          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
             68      North American Industry Classification System of the federal Executive Office of the
             69      President, Office of Management and Budget; and
             70          (II) for:
             71          (Aa) installation in an aircraft, including services relating to the installation of parts or
             72      equipment in the aircraft;
             73          (Bb) renovation of an aircraft; or
             74          (Cc) repair of an aircraft; or
             75          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
             76      commerce; or
             77          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
             78      aircraft operated by a common carrier in interstate or foreign commerce; and
             79          (b) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             80      a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
             81      refund:
             82          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
             83          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
             84          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
             85      the sale prior to filing for the refund;


             86          (iv) for sales and use taxes paid under this chapter on the sale;
             87          (v) in accordance with Section 59-1-1410 ; and
             88          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             89      the person files for the refund on or before September 30, 2011;
             90          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             91      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             92      exhibitor, distributor, or commercial television or radio broadcaster;
             93          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             94      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             95      washing of tangible personal property;
             96          (b) if a seller that sells at the same business location assisted cleaning or washing of
             97      tangible personal property and cleaning or washing of tangible personal property that is not
             98      assisted cleaning or washing of tangible personal property, the exemption described in
             99      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             100      or washing of the tangible personal property; and
             101          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
             102      Utah Administrative Rulemaking Act, the commission may make rules:
             103          (i) governing the circumstances under which sales are at the same business location;
             104      and
             105          (ii) establishing the procedures and requirements for a seller to separately account for
             106      sales of assisted cleaning or washing of tangible personal property;
             107          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             108      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             109      fulfilled;
             110          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             111      this state if the vehicle is:
             112          (a) not registered in this state; and
             113          (b) (i) not used in this state; or


             114          (ii) used in this state:
             115          (A) if the vehicle is not used to conduct business, for a time period that does not
             116      exceed the longer of:
             117          (I) 30 days in any calendar year; or
             118          (II) the time period necessary to transport the vehicle to the borders of this state; or
             119          (B) if the vehicle is used to conduct business, for the time period necessary to transport
             120      the vehicle to the borders of this state;
             121          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             122          (i) the item is intended for human use; and
             123          (ii) (A) a prescription was issued for the item; or
             124          (B) the item was purchased by a hospital or other medical facility; and
             125          (b) (i) Subsection (10)(a) applies to:
             126          (A) a drug;
             127          (B) a syringe; or
             128          (C) a stoma supply; and
             129          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             130      commission may by rule define the terms:
             131          (A) "syringe"; or
             132          (B) "stoma supply";
             133          (11) sales or use of property, materials, or services used in the construction of or
             134      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             135          (12) (a) sales of an item described in Subsection (12)(c) served by:
             136          (i) the following if the item described in Subsection (12)(c) is not available to the
             137      general public:
             138          (A) a church; or
             139          (B) a charitable institution;
             140          (ii) an institution of higher education if:
             141          (A) the item described in Subsection (12)(c) is not available to the general public; or


             142          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             143      offered by the institution of higher education; or
             144          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             145          (i) a medical facility; or
             146          (ii) a nursing facility; and
             147          (c) Subsections (12)(a) and (b) apply to:
             148          (i) food and food ingredients;
             149          (ii) prepared food; or
             150          (iii) alcoholic beverages;
             151          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             152      or a product transferred electronically by a person:
             153          (i) regardless of the number of transactions involving the sale of that tangible personal
             154      property or product transferred electronically by that person; and
             155          (ii) not regularly engaged in the business of selling that type of tangible personal
             156      property or product transferred electronically;
             157          (b) this Subsection (13) does not apply if:
             158          (i) the sale is one of a series of sales of a character to indicate that the person is
             159      regularly engaged in the business of selling that type of tangible personal property or product
             160      transferred electronically;
             161          (ii) the person holds that person out as regularly engaged in the business of selling that
             162      type of tangible personal property or product transferred electronically;
             163          (iii) the person sells an item of tangible personal property or product transferred
             164      electronically that the person purchased as a sale that is exempt under Subsection (25); or
             165          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             166      this state in which case the tax is based upon:
             167          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             168      sold; or
             169          (B) in the absence of a bill of sale or other written evidence of value, the fair market


             170      value of the vehicle or vessel being sold at the time of the sale as determined by the
             171      commission; and
             172          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             173      commission shall make rules establishing the circumstances under which:
             174          (i) a person is regularly engaged in the business of selling a type of tangible personal
             175      property or product transferred electronically;
             176          (ii) a sale of tangible personal property or a product transferred electronically is one of
             177      a series of sales of a character to indicate that a person is regularly engaged in the business of
             178      selling that type of tangible personal property or product transferred electronically; or
             179          (iii) a person holds that person out as regularly engaged in the business of selling a type
             180      of tangible personal property or product transferred electronically;
             181          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             182      July 1, 2006, for a purchase or lease by a manufacturing facility except for a cogeneration
             183      facility, of the following:
             184          (i) machinery and equipment that:
             185          (A) are used:
             186          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             187      recycler described in Subsection 59-12-102 (60)(b):
             188          (Aa) in the manufacturing process;
             189          (Bb) to manufacture an item sold as tangible personal property; and
             190          (Cc) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             191      (14)(a)(i)(A)(I) in the state; or
             192          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             193      59-12-102 (60)(b):
             194          (Aa) to process an item sold as tangible personal property; and
             195          (Bb) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             196      (14)(a)(i)(A)(II) in the state; and
             197          (B) have an economic life of three or more years; and


             198          (ii) normal operating repair or replacement parts that:
             199          (A) have an economic life of three or more years; and
             200          (B) are used:
             201          (I) for a manufacturing facility except for a manufacturing facility that is a scrap
             202      recycler described in Subsection 59-12-102 (60)(b):
             203          (Aa) in the manufacturing process; and
             204          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(I) in the
             205      state; or
             206          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             207      59-12-102 (60)(b):
             208          (Aa) to process an item sold as tangible personal property; and
             209          (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(II) in the
             210      state;
             211          (b) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             212      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             213      of the following:
             214          (i) machinery and equipment that:
             215          (A) are used:
             216          (I) in the manufacturing process;
             217          (II) to manufacture an item sold as tangible personal property; and
             218          (III) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
             219      (14)(b) in the state; and
             220          (B) have an economic life of three or more years; and
             221          (ii) normal operating repair or replacement parts that:
             222          (A) are used:
             223          (I) in the manufacturing process; and
             224          (II) in a manufacturing facility described in this Subsection (14)(b) in the state; and
             225          (B) have an economic life of three or more years;


             226          (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
             227      by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
             228      NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
             229      Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
             230      of the 2002 North American Industry Classification System of the federal Executive Office of
             231      the President, Office of Management and Budget, of the following:
             232          (i) machinery and equipment that:
             233          (A) are used:
             234          (I) (Aa) in the production process, other than the production of real property; or
             235          (Bb) in research and development; and
             236          (II) beginning on July 1, 2009, in an establishment described in this Subsection (14)(c)
             237      in the state; and
             238          (B) have an economic life of three or more years; and
             239          (ii) normal operating repair or replacement parts that:
             240          (A) have an economic life of three or more years; and
             241          (B) are used in:
             242          (I) (Aa) the production process, except for the production of real property; and
             243          (Bb) an establishment described in this Subsection (14)(c) in the state; or
             244          (II) (Aa) research and development; and
             245          (Bb) in an establishment described in this Subsection (14)(c) in the state;
             246          (d) (i) amounts paid or charged for a purchase or lease made on or after July 1, 2010,
             247      but on or before June 30, 2014, by an establishment described in NAICS Code 518112, Web
             248      Search Portals, of the 2002 North American Industry Classification System of the federal
             249      Executive Office of the President, Office of Management and Budget, of the following:
             250          (A) machinery and equipment that:
             251          (I) are used in the operation of the web search portal;
             252          (II) have an economic life of three or more years; and
             253          (III) are used in a new or expanding establishment described in this Subsection (14)(d)


             254      in the state; and
             255          (B) normal operating repair or replacement parts that:
             256          (I) are used in the operation of the web search portal;
             257          (II) have an economic life of three or more years; and
             258          (III) are used in a new or expanding establishment described in this Subsection (14)(d)
             259      in the state; or
             260          (ii) amounts paid or charged for a purchase or lease made on or after July 1, 2014, by
             261      an establishment described in NAICS Code 518112, Web Search Portals, of the 2002 North
             262      American Industry Classification System of the federal Executive Office of the President,
             263      Office of Management and Budget, of the following:
             264          (A) machinery and equipment that:
             265          (I) are used in the operation of the web search portal; and
             266          (II) have an economic life of three or more years; and
             267          (B) normal operating repair or replacement parts that:
             268          (I) are used in the operation of the web search portal; and
             269          (II) have an economic life of three or more years;
             270          (e) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
             271      Utah Administrative Rulemaking Act, the commission:
             272          (i) shall by rule define the term "establishment"; and
             273          (ii) may by rule define what constitutes:
             274          (A) processing an item sold as tangible personal property;
             275          (B) the production process, except for the production of real property;
             276          (C) research and development; or
             277          (D) a new or expanding establishment described in Subsection (14)(d) in the state; and
             278          (f) on or before October 1, 2011, and every five years after October 1, 2011, the
             279      commission shall:
             280          (i) review the exemptions described in this Subsection (14) and make
             281      recommendations to the Revenue and Taxation Interim Committee concerning whether the


             282      exemptions should be continued, modified, or repealed; and
             283          (ii) include in its report:
             284          (A) an estimate of the cost of the exemptions;
             285          (B) the purpose and effectiveness of the exemptions; and
             286          (C) the benefits of the exemptions to the state;
             287          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             288          (i) tooling;
             289          (ii) special tooling;
             290          (iii) support equipment;
             291          (iv) special test equipment; or
             292          (v) parts used in the repairs or renovations of tooling or equipment described in
             293      Subsections (15)(a)(i) through (iv); and
             294          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             295          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             296      performance of any aerospace or electronics industry contract with the United States
             297      government or any subcontract under that contract; and
             298          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             299      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             300      by:
             301          (A) a government identification tag placed on the tooling, equipment, or parts; or
             302          (B) listing on a government-approved property record if placing a government
             303      identification tag on the tooling, equipment, or parts is impractical;
             304          (16) sales of newspapers or newspaper subscriptions;
             305          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
             306      product transferred electronically traded in as full or part payment of the purchase price, except
             307      that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
             308      trade-ins are limited to other vehicles only, and the tax is based upon:
             309          (i) the bill of sale or other written evidence of value of the vehicle being sold and the


             310      vehicle being traded in; or
             311          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             312      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             313      commission; and
             314          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             315      following items of tangible personal property or products transferred electronically traded in as
             316      full or part payment of the purchase price:
             317          (i) money;
             318          (ii) electricity;
             319          (iii) water;
             320          (iv) gas; or
             321          (v) steam;
             322          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             323      or a product transferred electronically used or consumed primarily and directly in farming
             324      operations, regardless of whether the tangible personal property or product transferred
             325      electronically:
             326          (A) becomes part of real estate; or
             327          (B) is installed by a:
             328          (I) farmer;
             329          (II) contractor; or
             330          (III) subcontractor; or
             331          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
             332      product transferred electronically if the tangible personal property or product transferred
             333      electronically is exempt under Subsection (18)(a)(i); and
             334          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following are
             335      subject to the taxes imposed by this chapter:
             336          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
             337      incidental to farming:


             338          (I) machinery;
             339          (II) equipment;
             340          (III) materials; or
             341          (IV) supplies; and
             342          (B) tangible personal property that is considered to be used in a manner that is
             343      incidental to farming includes:
             344          (I) hand tools; or
             345          (II) maintenance and janitorial equipment and supplies;
             346          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
             347      transferred electronically if the tangible personal property or product transferred electronically
             348      is used in an activity other than farming; and
             349          (B) tangible personal property or a product transferred electronically that is considered
             350      to be used in an activity other than farming includes:
             351          (I) office equipment and supplies; or
             352          (II) equipment and supplies used in:
             353          (Aa) the sale or distribution of farm products;
             354          (Bb) research; or
             355          (Cc) transportation; or
             356          (iii) a vehicle required to be registered by the laws of this state during the period
             357      ending two years after the date of the vehicle's purchase;
             358          (19) sales of hay;
             359          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             360      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             361      garden, farm, or other agricultural produce is sold by:
             362          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             363      agricultural produce;
             364          (b) an employee of the producer described in Subsection (20)(a); or
             365          (c) a member of the immediate family of the producer described in Subsection (20)(a);


             366          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             367      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             368          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             369      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             370      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             371      manufacturer, processor, wholesaler, or retailer;
             372          (23) a product stored in the state for resale;
             373          (24) (a) purchases of a product if:
             374          (i) the product is:
             375          (A) purchased outside of this state;
             376          (B) brought into this state:
             377          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             378          (II) by a nonresident person who is not living or working in this state at the time of the
             379      purchase;
             380          (C) used for the personal use or enjoyment of the nonresident person described in
             381      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             382          (D) not used in conducting business in this state; and
             383          (ii) for:
             384          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
             385      the product for a purpose for which the product is designed occurs outside of this state;
             386          (B) a boat, the boat is registered outside of this state; or
             387          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             388      outside of this state;
             389          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             390          (i) a lease or rental of a product; or
             391          (ii) a sale of a vehicle exempt under Subsection (33); and
             392          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             393      purposes of Subsection (24)(a), the commission may by rule define what constitutes the


             394      following:
             395          (i) conducting business in this state if that phrase has the same meaning in this
             396      Subsection (24) as in Subsection (63);
             397          (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
             398      as in Subsection (63); or
             399          (iii) a purpose for which a product is designed if that phrase has the same meaning in
             400      this Subsection (24) as in Subsection (63);
             401          (25) a product purchased for resale in this state, in the regular course of business, either
             402      in its original form or as an ingredient or component part of a manufactured or compounded
             403      product;
             404          (26) a product upon which a sales or use tax was paid to some other state, or one of its
             405      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             406      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             407      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             408      Act;
             409          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             410      person for use in compounding a service taxable under the subsections;
             411          (28) purchases made in accordance with the special supplemental nutrition program for
             412      women, infants, and children established in 42 U.S.C. Sec. 1786;
             413          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             414      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             415      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             416      Manual of the federal Executive Office of the President, Office of Management and Budget;
             417          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             418      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
             419          (a) not registered in this state; and
             420          (b) (i) not used in this state; or
             421          (ii) used in this state:


             422          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
             423      time period that does not exceed the longer of:
             424          (I) 30 days in any calendar year; or
             425          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             426      the borders of this state; or
             427          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             428      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             429      state;
             430          (31) sales of aircraft manufactured in Utah;
             431          (32) amounts paid for the purchase of telecommunications service for purposes of
             432      providing telecommunications service;
             433          (33) sales, leases, or uses of the following:
             434          (a) a vehicle by an authorized carrier; or
             435          (b) tangible personal property that is installed on a vehicle:
             436          (i) sold or leased to or used by an authorized carrier; and
             437          (ii) before the vehicle is placed in service for the first time;
             438          (34) (a) 45% of the sales price of any new manufactured home; and
             439          (b) 100% of the sales price of any used manufactured home;
             440          (35) sales relating to schools and fundraising sales;
             441          (36) sales or rentals of durable medical equipment if:
             442          (a) a person presents a prescription for the durable medical equipment; and
             443          (b) the durable medical equipment is used for home use only;
             444          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             445      Section 72-11-102 ; and
             446          (b) the commission shall by rule determine the method for calculating sales exempt
             447      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             448          (38) sales to a ski resort of:
             449          (a) snowmaking equipment;


             450          (b) ski slope grooming equipment;
             451          (c) passenger ropeways as defined in Section 72-11-102 ; or
             452          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             453      described in Subsections (38)(a) through (c);
             454          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             455          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             456      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             457      59-12-102 ;
             458          (b) if a seller that sells or rents at the same business location the right to use or operate
             459      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             460      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             461      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             462      amusement, entertainment, or recreation for the assisted amusement devices; and
             463          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
             464      Utah Administrative Rulemaking Act, the commission may make rules:
             465          (i) governing the circumstances under which sales are at the same business location;
             466      and
             467          (ii) establishing the procedures and requirements for a seller to separately account for
             468      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
             469      assisted amusement devices;
             470          (41) (a) sales of photocopies by:
             471          (i) a governmental entity; or
             472          (ii) an entity within the state system of public education, including:
             473          (A) a school; or
             474          (B) the State Board of Education; or
             475          (b) sales of publications by a governmental entity;
             476          (42) amounts paid for admission to an athletic event at an institution of higher
             477      education that is subject to the provisions of Title IX of the Education Amendments of 1972,


             478      20 U.S.C. Sec. 1681 et seq.;
             479          (43) (a) sales made to or by:
             480          (i) an area agency on aging; or
             481          (ii) a senior citizen center owned by a county, city, or town; or
             482          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             483          (44) sales or leases of semiconductor fabricating, processing, research, or development
             484      materials regardless of whether the semiconductor fabricating, processing, research, or
             485      development materials:
             486          (a) actually come into contact with a semiconductor; or
             487          (b) ultimately become incorporated into real property;
             488          (45) an amount paid by or charged to a purchaser for accommodations and services
             489      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             490      59-12-104.2 ;
             491          (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             492      sports event registration certificate in accordance with Section 41-3-306 for the event period
             493      specified on the temporary sports event registration certificate;
             494          (47) (a) sales or uses of electricity, if the sales or uses are made under a tariff adopted
             495      by the Public Service Commission of Utah only for purchase of electricity produced from a
             496      new alternative energy source, as designated in the tariff by the Public Service Commission of
             497      Utah; and
             498          (b) the exemption under Subsection (47)(a) applies to the portion of the tariff rate a
             499      customer pays under the tariff described in Subsection (47)(a) that exceeds the tariff rate under
             500      the tariff described in Subsection (47)(a) that the customer would have paid absent the tariff;
             501          (48) sales or rentals of mobility enhancing equipment if a person presents a
             502      prescription for the mobility enhancing equipment;
             503          (49) sales of water in a:
             504          (a) pipe;
             505          (b) conduit;


             506          (c) ditch; or
             507          (d) reservoir;
             508          (50) sales of currency or coins that constitute legal tender of a state, the United States,
             509      or a foreign nation;
             510          (51) (a) sales of an item described in Subsection (51)(b) if the item:
             511          (i) does not constitute legal tender of a state, the United States, or a foreign nation; and
             512          (ii) has a gold, silver, or platinum content of 50% or more; and
             513          (b) Subsection (51)(a) applies to a gold, silver, or platinum:
             514          (i) ingot;
             515          (ii) bar;
             516          (iii) medallion; or
             517          (iv) decorative coin;
             518          (52) amounts paid on a sale-leaseback transaction;
             519          (53) sales of a prosthetic device:
             520          (a) for use on or in a human; and
             521          (b) (i) for which a prescription is required; or
             522          (ii) if the prosthetic device is purchased by a hospital or other medical facility;
             523          (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
             524      machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
             525      or equipment is primarily used in the production or postproduction of the following media for
             526      commercial distribution:
             527          (i) a motion picture;
             528          (ii) a television program;
             529          (iii) a movie made for television;
             530          (iv) a music video;
             531          (v) a commercial;
             532          (vi) a documentary; or
             533          (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the


             534      commission by administrative rule made in accordance with Subsection (54)(d); or
             535          (b) notwithstanding Subsection (54)(a), purchases, leases, or rentals of machinery or
             536      equipment by an establishment described in Subsection (54)(c) that is used for the production
             537      or postproduction of the following are subject to the taxes imposed by this chapter:
             538          (i) a live musical performance;
             539          (ii) a live news program; or
             540          (iii) a live sporting event;
             541          (c) the following establishments listed in the 1997 North American Industry
             542      Classification System of the federal Executive Office of the President, Office of Management
             543      and Budget, apply to Subsections (54)(a) and (b):
             544          (i) NAICS Code 512110; or
             545          (ii) NAICS Code 51219; and
             546          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             547      commission may by rule:
             548          (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
             549      or
             550          (ii) define:
             551          (A) "commercial distribution";
             552          (B) "live musical performance";
             553          (C) "live news program"; or
             554          (D) "live sporting event";
             555          (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             556      on or before June 30, 2027, of tangible personal property that:
             557          (i) is leased or purchased for or by a facility that:
             558          (A) is an alternative energy electricity production facility;
             559          (B) is located in the state; and
             560          (C) (I) becomes operational on or after July 1, 2004; or
             561          (II) has its generation capacity increased by one or more megawatts on or after July 1,


             562      2004, as a result of the use of the tangible personal property;
             563          (ii) has an economic life of five or more years; and
             564          (iii) is used to make the facility or the increase in capacity of the facility described in
             565      Subsection (55)(a)(i) operational up to the point of interconnection with an existing
             566      transmission grid including:
             567          (A) a wind turbine;
             568          (B) generating equipment;
             569          (C) a control and monitoring system;
             570          (D) a power line;
             571          (E) substation equipment;
             572          (F) lighting;
             573          (G) fencing;
             574          (H) pipes; or
             575          (I) other equipment used for locating a power line or pole; and
             576          (b) this Subsection (55) does not apply to:
             577          (i) tangible personal property used in construction of:
             578          (A) a new alternative energy electricity production facility; or
             579          (B) the increase in the capacity of an alternative energy electricity production facility;
             580          (ii) contracted services required for construction and routine maintenance activities;
             581      and
             582          (iii) unless the tangible personal property is used or acquired for an increase in capacity
             583      of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal property used or
             584      acquired after:
             585          (A) the alternative energy electricity production facility described in Subsection
             586      (55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
             587          (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
             588      in Subsection (55)(a)(iii);
             589          (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but


             590      on or before June 30, 2027, of tangible personal property that:
             591          (i) is leased or purchased for or by a facility that:
             592          (A) is a waste energy production facility;
             593          (B) is located in the state; and
             594          (C) (I) becomes operational on or after July 1, 2004; or
             595          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             596      2004, as a result of the use of the tangible personal property;
             597          (ii) has an economic life of five or more years; and
             598          (iii) is used to make the facility or the increase in capacity of the facility described in
             599      Subsection (56)(a)(i) operational up to the point of interconnection with an existing
             600      transmission grid including:
             601          (A) generating equipment;
             602          (B) a control and monitoring system;
             603          (C) a power line;
             604          (D) substation equipment;
             605          (E) lighting;
             606          (F) fencing;
             607          (G) pipes; or
             608          (H) other equipment used for locating a power line or pole; and
             609          (b) this Subsection (56) does not apply to:
             610          (i) tangible personal property used in construction of:
             611          (A) a new waste energy facility; or
             612          (B) the increase in the capacity of a waste energy facility;
             613          (ii) contracted services required for construction and routine maintenance activities;
             614      and
             615          (iii) unless the tangible personal property is used or acquired for an increase in capacity
             616      described in Subsection (56)(a)(i)(C)(II), tangible personal property used or acquired after:
             617          (A) the waste energy facility described in Subsection (56)(a)(i) is operational as


             618      described in Subsection (56)(a)(iii); or
             619          (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
             620      in Subsection (56)(a)(iii);
             621          (57) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             622      or before June 30, 2027, of tangible personal property that:
             623          (i) is leased or purchased for or by a facility that:
             624          (A) is located in the state;
             625          (B) produces fuel from alternative energy, including:
             626          (I) methanol; or
             627          (II) ethanol; and
             628          (C) (I) becomes operational on or after July 1, 2004; or
             629          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
             630      a result of the installation of the tangible personal property;
             631          (ii) has an economic life of five or more years; and
             632          (iii) is installed on the facility described in Subsection (57)(a)(i);
             633          (b) this Subsection (57) does not apply to:
             634          (i) tangible personal property used in construction of:
             635          (A) a new facility described in Subsection (57)(a)(i); or
             636          (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
             637          (ii) contracted services required for construction and routine maintenance activities;
             638      and
             639          (iii) unless the tangible personal property is used or acquired for an increase in capacity
             640      described in Subsection (57)(a)(i)(C)(II), tangible personal property used or acquired after:
             641          (A) the facility described in Subsection (57)(a)(i) is operational; or
             642          (B) the increased capacity described in Subsection (57)(a)(i) is operational;
             643          (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
             644      product transferred electronically to a person within this state if that tangible personal property
             645      or product transferred electronically is subsequently shipped outside the state and incorporated


             646      pursuant to contract into and becomes a part of real property located outside of this state;
             647          (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
             648      state or political entity to which the tangible personal property is shipped imposes a sales, use,
             649      gross receipts, or other similar transaction excise tax on the transaction against which the other
             650      state or political entity allows a credit for sales and use taxes imposed by this chapter; and
             651          (c) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             652      a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
             653      refund:
             654          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
             655          (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
             656      which the sale is made;
             657          (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
             658      sale prior to filing for the refund;
             659          (iv) for sales and use taxes paid under this chapter on the sale;
             660          (v) in accordance with Section 59-1-1410 ; and
             661          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             662      the person files for the refund on or before June 30, 2011;
             663          (59) purchases:
             664          (a) of one or more of the following items in printed or electronic format:
             665          (i) a list containing information that includes one or more:
             666          (A) names; or
             667          (B) addresses; or
             668          (ii) a database containing information that includes one or more:
             669          (A) names; or
             670          (B) addresses; and
             671          (b) used to send direct mail;
             672          (60) redemptions or repurchases of a product by a person if that product was:
             673          (a) delivered to a pawnbroker as part of a pawn transaction; and


             674          (b) redeemed or repurchased within the time period established in a written agreement
             675      between the person and the pawnbroker for redeeming or repurchasing the product;
             676          (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
             677          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
             678      and
             679          (ii) has a useful economic life of one or more years; and
             680          (b) the following apply to Subsection (61)(a):
             681          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             682          (ii) telecommunications equipment, machinery, or software required for 911 service;
             683          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             684          (iv) telecommunications switching or routing equipment, machinery, or software; or
             685          (v) telecommunications transmission equipment, machinery, or software;
             686          (62) (a) beginning on July 1, 2006, and ending on June 30, 2027, purchases of tangible
             687      personal property or a product transferred electronically that are used in the research and
             688      development of alternative energy technology; and
             689          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             690      commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
             691      purchases of tangible personal property or a product transferred electronically that are used in
             692      the research and development of alternative energy technology;
             693          (63) (a) purchases of tangible personal property or a product transferred electronically
             694      if:
             695          (i) the tangible personal property or product transferred electronically is:
             696          (A) purchased outside of this state;
             697          (B) brought into this state at any time after the purchase described in Subsection
             698      (63)(a)(i)(A); and
             699          (C) used in conducting business in this state; and
             700          (ii) for:
             701          (A) tangible personal property or a product transferred electronically other than the


             702      tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
             703      for a purpose for which the property is designed occurs outside of this state; or
             704          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             705      outside of this state;
             706          (b) the exemption provided for in Subsection (63)(a) does not apply to:
             707          (i) a lease or rental of tangible personal property or a product transferred electronically;
             708      or
             709          (ii) a sale of a vehicle exempt under Subsection (33); and
             710          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             711      purposes of Subsection (63)(a), the commission may by rule define what constitutes the
             712      following:
             713          (i) conducting business in this state if that phrase has the same meaning in this
             714      Subsection (63) as in Subsection (24);
             715          (ii) the first use of tangible personal property or a product transferred electronically if
             716      that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
             717          (iii) a purpose for which tangible personal property or a product transferred
             718      electronically is designed if that phrase has the same meaning in this Subsection (63) as in
             719      Subsection (24);
             720          (64) sales of disposable home medical equipment or supplies if:
             721          (a) a person presents a prescription for the disposable home medical equipment or
             722      supplies;
             723          (b) the disposable home medical equipment or supplies are used exclusively by the
             724      person to whom the prescription described in Subsection (64)(a) is issued; and
             725          (c) the disposable home medical equipment and supplies are listed as eligible for
             726      payment under:
             727          (i) Title XVIII, federal Social Security Act; or
             728          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             729          (65) sales:


             730          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
             731      District Act; or
             732          (b) of tangible personal property to a subcontractor of a public transit district, if the
             733      tangible personal property is:
             734          (i) clearly identified; and
             735          (ii) installed or converted to real property owned by the public transit district;
             736          (66) sales of construction materials:
             737          (a) purchased on or after July 1, 2010;
             738          (b) purchased by, on behalf of, or for the benefit of an international airport:
             739          (i) located within a county of the first class; and
             740          (ii) that has a United States customs office on its premises; and
             741          (c) if the construction materials are:
             742          (i) clearly identified;
             743          (ii) segregated; and
             744          (iii) installed or converted to real property:
             745          (A) owned or operated by the international airport described in Subsection (66)(b); and
             746          (B) located at the international airport described in Subsection (66)(b);
             747          (67) sales of construction materials:
             748          (a) purchased on or after July 1, 2008;
             749          (b) purchased by, on behalf of, or for the benefit of a new airport:
             750          (i) located within a county of the second class; and
             751          (ii) that is owned or operated by a city in which an airline as defined in Section
             752      59-2-102 is headquartered; and
             753          (c) if the construction materials are:
             754          (i) clearly identified;
             755          (ii) segregated; and
             756          (iii) installed or converted to real property:
             757          (A) owned or operated by the new airport described in Subsection (67)(b);


             758          (B) located at the new airport described in Subsection (67)(b); and
             759          (C) as part of the construction of the new airport described in Subsection (67)(b);
             760          (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
             761          (69) purchases and sales described in Section 63H-4-111 ;
             762          (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
             763      overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
             764      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             765      lists a state or country other than this state as the location of registry of the fixed wing turbine
             766      powered aircraft; or
             767          (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
             768      provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
             769      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             770      lists a state or country other than this state as the location of registry of the fixed wing turbine
             771      powered aircraft;
             772          (71) subject to Section 59-12-104.4 , sales of a textbook for a higher education course:
             773          (a) to a person admitted to an institution of higher education; and
             774          (b) by a seller, other than a bookstore owned by an institution of higher education, if
             775      51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
             776      textbook for a higher education course;
             777          (72) a license fee or tax a municipality imposes in accordance with Subsection
             778      10-1-203 (5) on a purchaser from a business for which the municipality provides an enhanced
             779      level of municipal services;
             780          (73) amounts paid or charged for construction materials used in the construction of a
             781      new or expanding life science research and development facility in the state, if the construction
             782      materials are:
             783          (a) clearly identified;
             784          (b) segregated; and
             785          (c) installed or converted to real property; [and]


             786          (74) amounts paid or charged for:
             787          (a) a purchase or lease of machinery and equipment that:
             788          (i) are used in performing qualified research:
             789          (A) as defined in Section 59-7-612 ;
             790          (B) in the state; and
             791          (C) with respect to which the purchaser pays or incurs a qualified research expense as
             792      defined in Section 59-7-612 ; and
             793          (ii) have an economic life of three or more years; and
             794          (b) normal operating repair or replacement parts:
             795          (i) for the machinery and equipment described in Subsection (74)(a); and
             796          (ii) that have an economic life of three or more years[.];
             797          (75) a sale or lease of tangible personal property used in the preparation of prepared
             798      food if:
             799          (a) for a sale:
             800          (i) the ownership of the seller and the ownership of the purchaser are identical; and
             801          (ii) the seller or the purchaser paid a tax under this chapter on the purchase of that
             802      tangible personal property prior to making the sale; or
             803          (b) for a lease:
             804          (i) the ownership of the lessor and the ownership of the lessee are identical; and
             805          (ii) the lessor or the lessee paid a tax under this chapter on the purchase of that tangible
             806      personal property prior to making the lease; and
             807          (76) (a) purchases of machinery or equipment if:
             808          (i) the purchaser is an establishment described in NAICS Subsector 713, Amusement,
             809      Gambling, and Recreation Industries, of the 2012 North American Industry Classification
             810      System of the federal Executive Office of the President, Office of Management and Budget;
             811          (ii) the machinery or equipment:
             812          (A) has an economic life of three or more years; and
             813          (B) is used by one or more persons who pay admission or user fees described in


             814      Subsection 59-12-103 (1)(f) to the purchaser of the machinery and equipment; and
             815          (iii) 51% or more of the purchaser's sales revenue for the previous calendar quarter is:
             816          (A) amounts paid or charged as admission or user fees described in Subsection
             817      59-12-103 (1)(f); and
             818          (B) subject to taxation under this chapter;
             819          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             820      commission may make rules for verifying that 51% of a purchaser's sales revenue for the
             821      previous calendar quarter is:
             822          (i) amounts paid or charged as admission or user fees described in Subsection
             823      59-12-103 (1)(f); and
             824          (ii) subject to taxation under this chapter; and
             825          (c) on or before the November 2018 interim meeting, and every five years after the
             826      November 2018 interim meeting, the commission shall review the exemption provided in this
             827      Subsection (76) and report to the Revenue and Taxation Interim Committee on:
             828          (i) the revenue lost to the state and local taxing jurisdictions as a result of the
             829      exemption;
             830          (ii) the purpose and effectiveness of the exemption; and
             831          (iii) whether the exemption benefits the state.
             832          Section 2. Effective date.
             833          This bill takes effect on July 1, 2013.


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