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S.B. 65

This document includes Senate Committee Amendments incorporated into the bill on Fri, Feb 14, 2014 at 9:40 AM by lpoole. -->              1     

SALES AND USE TAX EXEMPTION MODIFICATIONS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Howard A. Stephenson

             5     
House Sponsor: Ryan D. Wilcox

             6     

             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions related to sales and use taxes.
             10      Highlighted Provisions:
             11          This bill:
             12          .    modifies definitions;
             13          .    addresses the sales and use taxation of parts used in the repair or renovation of
             14      tangible personal property;
             15          .    addresses a sales and use exemption for certain manufacturing, processing,
             16      producing, operating, or research and development activities; and
             17          .    makes technical and conforming changes.
             18      Money Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          This bill takes effect on July 1, 2014.
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          59-12-102 (Effective 07/01/14), as last amended by Laws of Utah 2013, Chapters 229,
             25      234, 266, and 441
             26          59-12-103 (Effective 07/01/14), as last amended by Laws of Utah 2013, Chapters 150
             27      and 227



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             28
         59-12-104, as last amended by Laws of Utah 2013, Chapters 82, 223, 229, 234, and 441
             29     

             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 59-12-102 (Effective 07/01/14) is amended to read:
             32           59-12-102 (Effective 07/01/14). Definitions.
             33          As used in this chapter:
             34          (1) "800 service" means a telecommunications service that:
             35          (a) allows a caller to dial a toll-free number without incurring a charge for the call; and
             36          (b) is typically marketed:
             37          (i) under the name 800 toll-free calling;
             38          (ii) under the name 855 toll-free calling;
             39          (iii) under the name 866 toll-free calling;
             40          (iv) under the name 877 toll-free calling;
             41          (v) under the name 888 toll-free calling; or
             42          (vi) under a name similar to Subsections (1)(b)(i) through (v) as designated by the
             43      Federal Communications Commission.
             44          (2) (a) "900 service" means an inbound toll telecommunications service that:
             45          (i) a subscriber purchases;
             46          (ii) allows a customer of the subscriber described in Subsection (2)(a)(i) to call in to
             47      the subscriber's:
             48          (A) prerecorded announcement; or
             49          (B) live service; and
             50          (iii) is typically marketed:
             51          (A) under the name 900 service; or
             52          (B) under a name similar to Subsection (2)(a)(iii)(A) as designated by the Federal
             53      Communications Commission.
             54          (b) "900 service" does not include a charge for:
             55          (i) a collection service a seller of a telecommunications service provides to a
             56      subscriber; or
             57          (ii) the following a subscriber sells to the subscriber's customer:
             58          (A) a product; or



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             59
         (B) a service.
             60          (3) (a) "Admission or user fees" includes season passes.
             61          (b) "Admission or user fees" does not include annual membership dues to private
             62      organizations.
             63          (4) "Agreement" means the Streamlined Sales and Use Tax Agreement adopted on
             64      November 12, 2002, including amendments made to the Streamlined Sales and Use Tax
             65      Agreement after November 12, 2002.
             66          (5) "Agreement combined tax rate" means the sum of the tax rates:
             67          (a) listed under Subsection (6); and
             68          (b) that are imposed within a local taxing jurisdiction.
             69          (6) "Agreement sales and use tax" means a tax imposed under:
             70          (a) Subsection 59-12-103 (2)(a)(i)(A);
             71          (b) Subsection 59-12-103 (2)(b)(i);
             72          (c) Subsection 59-12-103 (2)(c)(i);
             73          (d) Subsection 59-12-103 (2)(d)(i)(A)(I);
             74          (e) Section 59-12-204 ;
             75          (f) Section 59-12-401 ;
             76          (g) Section 59-12-402 ;
             77          (h) Section 59-12-703 ;
             78          (i) Section 59-12-802 ;
             79          (j) Section 59-12-804 ;
             80          (k) Section 59-12-1102 ;
             81          (l) Section 59-12-1302 ;
             82          (m) Section 59-12-1402 ;
             83          (n) Section 59-12-1802 ;
             84          (o) Section 59-12-2003 ;
             85          (p) Section 59-12-2103 ;
             86          (q) Section 59-12-2213 ;
             87          (r) Section 59-12-2214 ;
             88          (s) Section 59-12-2215 ;
             89          (t) Section 59-12-2216 ;



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             90
         (u) Section 59-12-2217 ; or
             91          (v) Section 59-12-2218 .
             92          (7) "Aircraft" is as defined in Section 72-10-102 .
             93          (8) "Aircraft maintenance, repair, and overhaul provider" means a business entity:
             94          (a) except for:
             95          (i) an airline as defined in Section 59-2-102 ; or
             96          (ii) an affiliated group, as defined in Section 59-7-101 , except that "affiliated group"
             97      includes a corporation that is qualified to do business but is not otherwise doing business in the
             98      state, of an airline; and
             99          (b) that has the workers, expertise, and facilities to perform the following, regardless of
             100      whether the business entity performs the following in this state:
             101          (i) check, diagnose, overhaul, and repair:
             102          (A) an onboard system of a fixed wing turbine powered aircraft; and
             103          (B) the parts that comprise an onboard system of a fixed wing turbine powered aircraft;
             104          (ii) assemble, change, dismantle, inspect, and test a fixed wing turbine powered aircraft
             105      engine;
             106          (iii) perform at least the following maintenance on a fixed wing turbine powered
             107      aircraft:
             108          (A) an inspection;
             109          (B) a repair, including a structural repair or modification;
             110          (C) changing landing gear; and
             111          (D) addressing issues related to an aging fixed wing turbine powered aircraft;
             112          (iv) completely remove the existing paint of a fixed wing turbine powered aircraft and
             113      completely apply new paint to the fixed wing turbine powered aircraft; and
             114          (v) refurbish the interior of a fixed wing turbine powered aircraft in a manner that
             115      results in a change in the fixed wing turbine powered aircraft's certification requirements by the
             116      authority that certifies the fixed wing turbine powered aircraft.
             117          (9) "Alcoholic beverage" means a beverage that:
             118          (a) is suitable for human consumption; and
             119          (b) contains .5% or more alcohol by volume.
             120          (10) "Alternative energy" means:



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         (a) biomass energy;
             122          (b) geothermal energy;
             123          (c) hydroelectric energy;
             124          (d) solar energy;
             125          (e) wind energy; or
             126          (f) energy that is derived from:
             127          (i) coal-to-liquids;
             128          (ii) nuclear fuel;
             129          (iii) oil-impregnated diatomaceous earth;
             130          (iv) oil sands;
             131          (v) oil shale; or
             132          (vi) petroleum coke.
             133          (11) (a) Subject to Subsection (11)(b), "alternative energy electricity production
             134      facility" means a facility that:
             135          (i) uses alternative energy to produce electricity; and
             136          (ii) has a production capacity of two megawatts or greater.
             137          (b) A facility is an alternative energy electricity production facility regardless of
             138      whether the facility is:
             139          (i) connected to an electric grid; or
             140          (ii) located on the premises of an electricity consumer.
             141          (12) (a) "Ancillary service" means a service associated with, or incidental to, the
             142      provision of telecommunications service.
             143          (b) "Ancillary service" includes:
             144          (i) a conference bridging service;
             145          (ii) a detailed communications billing service;
             146          (iii) directory assistance;
             147          (iv) a vertical service; or
             148          (v) a voice mail service.
             149          (13) "Area agency on aging" is as defined in Section 62A-3-101 .
             150          (14) "Assisted amusement device" means an amusement device, skill device, or ride
             151      device that is started and stopped by an individual:



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         (a) who is not the purchaser or renter of the right to use or operate the amusement
             153      device, skill device, or ride device; and
             154          (b) at the direction of the seller of the right to use the amusement device, skill device,
             155      or ride device.
             156          (15) "Assisted cleaning or washing of tangible personal property" means cleaning or
             157      washing of tangible personal property if the cleaning or washing labor is primarily performed
             158      by an individual:
             159          (a) who is not the purchaser of the cleaning or washing of the tangible personal
             160      property; and
             161          (b) at the direction of the seller of the cleaning or washing of the tangible personal
             162      property.
             163          (16) "Authorized carrier" means:
             164          (a) in the case of vehicles operated over public highways, the holder of credentials
             165      indicating that the vehicle is or will be operated pursuant to both the International Registration
             166      Plan and the International Fuel Tax Agreement;
             167          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
             168      certificate or air carrier's operating certificate; or
             169          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             170      stock, [the holder of a certificate issued by the United States Surface Transportation Board] a
             171      person who uses locomotives, freight cars, railroad work equipment, or other rolling stock in
             172      more than one state.
             173          (17) (a) Except as provided in Subsection (17)(b), "biomass energy" means any of the
             174      following that is used as the primary source of energy to produce fuel or electricity:
             175          (i) material from a plant or tree; or
             176          (ii) other organic matter that is available on a renewable basis, including:
             177          (A) slash and brush from forests and woodlands;
             178          (B) animal waste;
             179          (C) methane produced:
             180          (I) at landfills; or
             181          (II) as a byproduct of the treatment of wastewater residuals;
             182          (D) aquatic plants; and



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         (E) agricultural products.
             184          (b) "Biomass energy" does not include:
             185          (i) black liquor;
             186          (ii) treated woods; or
             187          (iii) biomass from municipal solid waste other than methane produced:
             188          (A) at landfills; or
             189          (B) as a byproduct of the treatment of wastewater residuals.
             190          (18) (a) "Bundled transaction" means the sale of two or more items of tangible personal
             191      property, products, or services if the tangible personal property, products, or services are:
             192          (i) distinct and identifiable; and
             193          (ii) sold for one nonitemized price.
             194          (b) "Bundled transaction" does not include:
             195          (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
             196      the basis of the selection by the purchaser of the items of tangible personal property included in
             197      the transaction;
             198          (ii) the sale of real property;
             199          (iii) the sale of services to real property;
             200          (iv) the retail sale of tangible personal property and a service if:
             201          (A) the tangible personal property:
             202          (I) is essential to the use of the service; and
             203          (II) is provided exclusively in connection with the service; and
             204          (B) the service is the true object of the transaction;
             205          (v) the retail sale of two services if:
             206          (A) one service is provided that is essential to the use or receipt of a second service;
             207          (B) the first service is provided exclusively in connection with the second service; and
             208          (C) the second service is the true object of the transaction;
             209          (vi) a transaction that includes tangible personal property or a product subject to
             210      taxation under this chapter and tangible personal property or a product that is not subject to
             211      taxation under this chapter if the:
             212          (A) seller's purchase price of the tangible personal property or product subject to
             213      taxation under this chapter is de minimis; or



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         (B) seller's sales price of the tangible personal property or product subject to taxation
             215      under this chapter is de minimis; and
             216          (vii) the retail sale of tangible personal property that is not subject to taxation under
             217      this chapter and tangible personal property that is subject to taxation under this chapter if:
             218          (A) that retail sale includes:
             219          (I) food and food ingredients;
             220          (II) a drug;
             221          (III) durable medical equipment;
             222          (IV) mobility enhancing equipment;
             223          (V) an over-the-counter drug;
             224          (VI) a prosthetic device; or
             225          (VII) a medical supply; and
             226          (B) subject to Subsection (18)(f):
             227          (I) the seller's purchase price of the tangible personal property subject to taxation under
             228      this chapter is 50% or less of the seller's total purchase price of that retail sale; or
             229          (II) the seller's sales price of the tangible personal property subject to taxation under
             230      this chapter is 50% or less of the seller's total sales price of that retail sale.
             231          (c) (i) For purposes of Subsection (18)(a)(i), tangible personal property, a product, or a
             232      service that is distinct and identifiable does not include:
             233          (A) packaging that:
             234          (I) accompanies the sale of the tangible personal property, product, or service; and
             235          (II) is incidental or immaterial to the sale of the tangible personal property, product, or
             236      service;
             237          (B) tangible personal property, a product, or a service provided free of charge with the
             238      purchase of another item of tangible personal property, a product, or a service; or
             239          (C) an item of tangible personal property, a product, or a service included in the
             240      definition of "purchase price."
             241          (ii) For purposes of Subsection (18)(c)(i)(B), an item of tangible personal property, a
             242      product, or a service is provided free of charge with the purchase of another item of tangible
             243      personal property, a product, or a service if the sales price of the purchased item of tangible
             244      personal property, product, or service does not vary depending on the inclusion of the tangible



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             245
     personal property, product, or service provided free of charge.
             246          (d) (i) For purposes of Subsection (18)(a)(ii), property sold for one nonitemized price
             247      does not include a price that is separately identified by tangible personal property, product, or
             248      service on the following, regardless of whether the following is in paper format or electronic
             249      format:
             250          (A) a binding sales document; or
             251          (B) another supporting sales-related document that is available to a purchaser.
             252          (ii) For purposes of Subsection (18)(d)(i), a binding sales document or another
             253      supporting sales-related document that is available to a purchaser includes:
             254          (A) a bill of sale;
             255          (B) a contract;
             256          (C) an invoice;
             257          (D) a lease agreement;
             258          (E) a periodic notice of rates and services;
             259          (F) a price list;
             260          (G) a rate card;
             261          (H) a receipt; or
             262          (I) a service agreement.
             263          (e) (i) For purposes of Subsection (18)(b)(vi), the sales price of tangible personal
             264      property or a product subject to taxation under this chapter is de minimis if:
             265          (A) the seller's purchase price of the tangible personal property or product is 10% or
             266      less of the seller's total purchase price of the bundled transaction; or
             267          (B) the seller's sales price of the tangible personal property or product is 10% or less of
             268      the seller's total sales price of the bundled transaction.
             269          (ii) For purposes of Subsection (18)(b)(vi), a seller:
             270          (A) shall use the seller's purchase price or the seller's sales price to determine if the
             271      purchase price or sales price of the tangible personal property or product subject to taxation
             272      under this chapter is de minimis; and
             273          (B) may not use a combination of the seller's purchase price and the seller's sales price
             274      to determine if the purchase price or sales price of the tangible personal property or product
             275      subject to taxation under this chapter is de minimis.



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         (iii) For purposes of Subsection (18)(b)(vi), a seller shall use the full term of a service
             277      contract to determine if the sales price of tangible personal property or a product is de minimis.
             278          (f) For purposes of Subsection (18)(b)(vii)(B), a seller may not use a combination of
             279      the seller's purchase price and the seller's sales price to determine if tangible personal property
             280      subject to taxation under this chapter is 50% or less of the seller's total purchase price or sales
             281      price of that retail sale.
             282          (19) "Certified automated system" means software certified by the governing board of
             283      the agreement that:
             284          (a) calculates the agreement sales and use tax imposed within a local taxing
             285      jurisdiction:
             286          (i) on a transaction; and
             287          (ii) in the states that are members of the agreement;
             288          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             289      member of the agreement; and
             290          (c) maintains a record of the transaction described in Subsection (19)(a)(i).
             291          (20) "Certified service provider" means an agent certified:
             292          (a) by the governing board of the agreement; and
             293          (b) to perform all of a seller's sales and use tax functions for an agreement sales and
             294      use tax other than the seller's obligation under Section 59-12-124 to remit a tax on the seller's
             295      own purchases.
             296          (21) (a) Subject to Subsection (21)(b), "clothing" means all human wearing apparel
             297      suitable for general use.
             298          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             299      commission shall make rules:
             300          (i) listing the items that constitute "clothing"; and
             301          (ii) that are consistent with the list of items that constitute "clothing" under the
             302      agreement.
             303          (22) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
             304          (23) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
             305      fuels that does not constitute industrial use under Subsection (55) or residential use under
             306      Subsection (105).



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         (24) (a) "Common carrier" means a person engaged in or transacting the business of
             308      transporting passengers, freight, merchandise, or other property for hire within this state.
             309          (b) (i) "Common carrier" does not include a person who, at the time the person is
             310      traveling to or from that person's place of employment, transports a passenger to or from the
             311      passenger's place of employment.
             312          (ii) For purposes of Subsection (24)(b)(i), in accordance with Title 63G, Chapter 3,
             313      Utah Administrative Rulemaking Act, the commission may make rules defining what
             314      constitutes a person's place of employment.
             315          (25) "Component part" includes:
             316          (a) poultry, dairy, and other livestock feed, and their components;
             317          (b) baling ties and twine used in the baling of hay and straw;
             318          (c) fuel used for providing temperature control of orchards and commercial
             319      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             320      off-highway type farm machinery; and
             321          (d) feed, seeds, and seedlings.
             322          (26) "Computer" means an electronic device that accepts information:
             323          (a) (i) in digital form; or
             324          (ii) in a form similar to digital form; and
             325          (b) manipulates that information for a result based on a sequence of instructions.
             326          (27) "Computer software" means a set of coded instructions designed to cause:
             327          (a) a computer to perform a task; or
             328          (b) automatic data processing equipment to perform a task.
             329          (28) "Computer software maintenance contract" means a contract that obligates a seller
             330      of computer software to provide a customer with:
             331          (a) future updates or upgrades to computer software;
             332          (b) support services with respect to computer software; or
             333          (c) a combination of Subsections (28)(a) and (b).
             334          (29) (a) "Conference bridging service" means an ancillary service that links two or
             335      more participants of an audio conference call or video conference call.
             336          (b) "Conference bridging service" may include providing a telephone number as part of
             337      the ancillary service described in Subsection (29)(a).



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             338
         (c) "Conference bridging service" does not include a telecommunications service used
             339      to reach the ancillary service described in Subsection (29)(a).
             340          (30) "Construction materials" means any tangible personal property that will be
             341      converted into real property.
             342          (31) "Delivered electronically" means delivered to a purchaser by means other than
             343      tangible storage media.
             344          (32) (a) "Delivery charge" means a charge:
             345          (i) by a seller of:
             346          (A) tangible personal property;
             347          (B) a product transferred electronically; or
             348          (C) services; and
             349          (ii) for preparation and delivery of the tangible personal property, product transferred
             350      electronically, or services described in Subsection (32)(a)(i) to a location designated by the
             351      purchaser.
             352          (b) "Delivery charge" includes a charge for the following:
             353          (i) transportation;
             354          (ii) shipping;
             355          (iii) postage;
             356          (iv) handling;
             357          (v) crating; or
             358          (vi) packing.
             359          (33) "Detailed telecommunications billing service" means an ancillary service of
             360      separately stating information pertaining to individual calls on a customer's billing statement.
             361          (34) "Dietary supplement" means a product, other than tobacco, that:
             362          (a) is intended to supplement the diet;
             363          (b) contains one or more of the following dietary ingredients:
             364          (i) a vitamin;
             365          (ii) a mineral;
             366          (iii) an herb or other botanical;
             367          (iv) an amino acid;
             368          (v) a dietary substance for use by humans to supplement the diet by increasing the total



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             369
     dietary intake; or
             370          (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
             371      described in Subsections (34)(b)(i) through (v);
             372          (c) (i) except as provided in Subsection (34)(c)(ii), is intended for ingestion in:
             373          (A) tablet form;
             374          (B) capsule form;
             375          (C) powder form;
             376          (D) softgel form;
             377          (E) gelcap form; or
             378          (F) liquid form; or
             379          (ii) if the product is not intended for ingestion in a form described in Subsections
             380      (34)(c)(i)(A) through (F), is not represented:
             381          (A) as conventional food; and
             382          (B) for use as a sole item of:
             383          (I) a meal; or
             384          (II) the diet; and
             385          (d) is required to be labeled as a dietary supplement:
             386          (i) identifiable by the "Supplemental Facts" box found on the label; and
             387          (ii) as required by 21 C.F.R. Sec. 101.36.
             388          (35) (a) "Digital audio work" means a work that results from the fixation of a series of
             389      musical, spoken, or other sounds.
             390          (b) "Digital audio work" includes a ringtone.
             391          (36) "Digital audio-visual work" means a series of related images which, when shown
             392      in succession, imparts an impression of motion, together with accompanying sounds, if any.
             393          (37) "Digital book" means a work that is generally recognized in the ordinary and usual
             394      sense as a book.
             395          (38) (a) "Direct mail" means printed material delivered or distributed by United States
             396      mail or other delivery service:
             397          (i) to:
             398          (A) a mass audience; or
             399          (B) addressees on a mailing list provided:



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             400
         (I) by a purchaser of the mailing list; or
             401          (II) at the discretion of the purchaser of the mailing list; and
             402          (ii) if the cost of the printed material is not billed directly to the recipients.
             403          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
             404      purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             405          (c) "Direct mail" does not include multiple items of printed material delivered to a
             406      single address.
             407          (39) "Directory assistance" means an ancillary service of providing:
             408          (a) address information; or
             409          (b) telephone number information.
             410          (40) (a) "Disposable home medical equipment or supplies" means medical equipment
             411      or supplies that:
             412          (i) cannot withstand repeated use; and
             413          (ii) are purchased by, for, or on behalf of a person other than:
             414          (A) a health care facility as defined in Section 26-21-2 ;
             415          (B) a health care provider as defined in Section 78B-3-403 ;
             416          (C) an office of a health care provider described in Subsection (40)(a)(ii)(B); or
             417          (D) a person similar to a person described in Subsections (40)(a)(ii)(A) through (C).
             418          (b) "Disposable home medical equipment or supplies" does not include:
             419          (i) a drug;
             420          (ii) durable medical equipment;
             421          (iii) a hearing aid;
             422          (iv) a hearing aid accessory;
             423          (v) mobility enhancing equipment; or
             424          (vi) tangible personal property used to correct impaired vision, including:
             425          (A) eyeglasses; or
             426          (B) contact lenses.
             427          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             428      commission may by rule define what constitutes medical equipment or supplies.
             429          (41) (a) "Drug" means a compound, substance, or preparation, or a component of a
             430      compound, substance, or preparation that is:



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             431
         (i) recognized in:
             432          (A) the official United States Pharmacopoeia;
             433          (B) the official Homeopathic Pharmacopoeia of the United States;
             434          (C) the official National Formulary; or
             435          (D) a supplement to a publication listed in Subsections (41)(a)(i)(A) through (C);
             436          (ii) intended for use in the:
             437          (A) diagnosis of disease;
             438          (B) cure of disease;
             439          (C) mitigation of disease;
             440          (D) treatment of disease; or
             441          (E) prevention of disease; or
             442          (iii) intended to affect:
             443          (A) the structure of the body; or
             444          (B) any function of the body.
             445          (b) "Drug" does not include:
             446          (i) food and food ingredients;
             447          (ii) a dietary supplement;
             448          (iii) an alcoholic beverage; or
             449          (iv) a prosthetic device.
             450          (42) (a) Except as provided in Subsection (42)(c), "durable medical equipment" means
             451      equipment that:
             452          (i) can withstand repeated use;
             453          (ii) is primarily and customarily used to serve a medical purpose;
             454          (iii) generally is not useful to a person in the absence of illness or injury; and
             455          (iv) is not worn in or on the body.
             456          (b) "Durable medical equipment" includes parts used in the repair or replacement of the
             457      equipment described in Subsection (42)(a).
             458          (c) "Durable medical equipment" does not include mobility enhancing equipment.
             459          (43) "Electronic" means:
             460          (a) relating to technology; and
             461          (b) having:



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             462
         (i) electrical capabilities;
             463          (ii) digital capabilities;
             464          (iii) magnetic capabilities;
             465          (iv) wireless capabilities;
             466          (v) optical capabilities;
             467          (vi) electromagnetic capabilities; or
             468          (vii) capabilities similar to Subsections (43)(b)(i) through (vi).
             469          (44) "Electronic financial payment service" means an establishment:
             470          (a) within NAICS Code 522320, Financial Transactions Processing, Reserve, and
             471      Clearinghouse Activities, of the 2012 North American Industry Classification System of the
             472      federal Executive Office of the President, Office of Management and Budget; and
             473          (b) that performs electronic financial payment services.
             474          (45) "Employee" is as defined in Section 59-10-401 .
             475          (46) "Fixed guideway" means a public transit facility that uses and occupies:
             476          (a) rail for the use of public transit; or
             477          (b) a separate right-of-way for the use of public transit.
             478          (47) "Fixed wing turbine powered aircraft" means an aircraft that:
             479          (a) is powered by turbine engines;
             480          (b) operates on jet fuel; and
             481          (c) has wings that are permanently attached to the fuselage of the aircraft.
             482          (48) "Fixed wireless service" means a telecommunications service that provides radio
             483      communication between fixed points.
             484          (49) (a) "Food and food ingredients" means substances:
             485          (i) regardless of whether the substances are in:
             486          (A) liquid form;
             487          (B) concentrated form;
             488          (C) solid form;
             489          (D) frozen form;
             490          (E) dried form; or
             491          (F) dehydrated form; and
             492          (ii) that are:



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             493
         (A) sold for:
             494          (I) ingestion by humans; or
             495          (II) chewing by humans; and
             496          (B) consumed for the substance's:
             497          (I) taste; or
             498          (II) nutritional value.
             499          (b) "Food and food ingredients" includes an item described in Subsection (90)(b)(iii).
             500          (c) "Food and food ingredients" does not include:
             501          (i) an alcoholic beverage;
             502          (ii) tobacco; or
             503          (iii) prepared food.
             504          (50) (a) "Fundraising sales" means sales:
             505          (i) (A) made by a school; or
             506          (B) made by a school student;
             507          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             508      materials, or provide transportation; and
             509          (iii) that are part of an officially sanctioned school activity.
             510          (b) For purposes of Subsection (50)(a)(iii), "officially sanctioned school activity"
             511      means a school activity:
             512          (i) that is conducted in accordance with a formal policy adopted by the school or school
             513      district governing the authorization and supervision of fundraising activities;
             514          (ii) that does not directly or indirectly compensate an individual teacher or other
             515      educational personnel by direct payment, commissions, or payment in kind; and
             516          (iii) the net or gross revenues from which are deposited in a dedicated account
             517      controlled by the school or school district.
             518          (51) "Geothermal energy" means energy contained in heat that continuously flows
             519      outward from the earth that is used as the sole source of energy to produce electricity.
             520          (52) "Governing board of the agreement" means the governing board of the agreement
             521      that is:
             522          (a) authorized to administer the agreement; and
             523          (b) established in accordance with the agreement.



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             524
         (53) (a) For purposes of Subsection 59-12-104 (41), "governmental entity" means:
             525          (i) the executive branch of the state, including all departments, institutions, boards,
             526      divisions, bureaus, offices, commissions, and committees;
             527          (ii) the judicial branch of the state, including the courts, the Judicial Council, the
             528      Office of the Court Administrator, and similar administrative units in the judicial branch;
             529          (iii) the legislative branch of the state, including the House of Representatives, the
             530      Senate, the Legislative Printing Office, the Office of Legislative Research and General
             531      Counsel, the Office of the Legislative Auditor General, and the Office of the Legislative Fiscal
             532      Analyst;
             533          (iv) the National Guard;
             534          (v) an independent entity as defined in Section 63E-1-102 ; or
             535          (vi) a political subdivision as defined in Section 17B-1-102 .
             536          (b) "Governmental entity" does not include the state systems of public and higher
             537      education, including:
             538          (i) a college campus of the Utah College of Applied Technology;
             539          (ii) a school;
             540          (iii) the State Board of Education;
             541          (iv) the State Board of Regents; or
             542          (v) an institution of higher education.
             543          (54) "Hydroelectric energy" means water used as the sole source of energy to produce
             544      electricity.
             545          (55) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
             546      other fuels:
             547          (a) in mining or extraction of minerals;
             548          (b) in agricultural operations to produce an agricultural product up to the time of
             549      harvest or placing the agricultural product into a storage facility, including:
             550          (i) commercial greenhouses;
             551          (ii) irrigation pumps;
             552          (iii) farm machinery;
             553          (iv) implements of husbandry as defined in Section 41-1a-102 that are not registered
             554      under Title 41, Chapter 1a, Part 2, Registration; and



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             555
         (v) other farming activities;
             556          (c) in manufacturing tangible personal property at an establishment described in SIC
             557      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             558      Executive Office of the President, Office of Management and Budget;
             559          (d) by a scrap recycler if:
             560          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             561      one or more of the following items into prepared grades of processed materials for use in new
             562      products:
             563          (A) iron;
             564          (B) steel;
             565          (C) nonferrous metal;
             566          (D) paper;
             567          (E) glass;
             568          (F) plastic;
             569          (G) textile; or
             570          (H) rubber; and
             571          (ii) the new products under Subsection (55)(d)(i) would otherwise be made with
             572      nonrecycled materials; or
             573          (e) in producing a form of energy or steam described in Subsection 54-2-1 (2)(a) by a
             574      cogeneration facility as defined in Section 54-2-1 .
             575          (56) (a) Except as provided in Subsection (56)(b), "installation charge" means a charge
             576      for installing:
             577          (i) tangible personal property; or
             578          (ii) a product transferred electronically.
             579          (b) "Installation charge" does not include a charge for:
             580          (i) repairs or renovations of:
             581          (A) tangible personal property; or
             582          (B) a product transferred electronically; or
             583          (ii) attaching tangible personal property or a product transferred electronically:
             584          (A) to other tangible personal property; and
             585          (B) as part of a manufacturing or fabrication process.



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             586
         (57) "Institution of higher education" means an institution of higher education listed in
             587      Section 53B-2-101 .
             588          (58) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             589      personal property or a product transferred electronically for:
             590          (i) (A) a fixed term; or
             591          (B) an indeterminate term; and
             592          (ii) consideration.
             593          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
             594      amount of consideration may be increased or decreased by reference to the amount realized
             595      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             596      Code.
             597          (c) "Lease" or "rental" does not include:
             598          (i) a transfer of possession or control of property under a security agreement or
             599      deferred payment plan that requires the transfer of title upon completion of the required
             600      payments;
             601          (ii) a transfer of possession or control of property under an agreement that requires the
             602      transfer of title:
             603          (A) upon completion of required payments; and
             604          (B) if the payment of an option price does not exceed the greater of:
             605          (I) $100; or
             606          (II) 1% of the total required payments; or
             607          (iii) providing tangible personal property along with an operator for a fixed period of
             608      time or an indeterminate period of time if the operator is necessary for equipment to perform as
             609      designed.
             610          (d) For purposes of Subsection (58)(c)(iii), an operator is necessary for equipment to
             611      perform as designed if the operator's duties exceed the:
             612          (i) set-up of tangible personal property;
             613          (ii) maintenance of tangible personal property; or
             614          (iii) inspection of tangible personal property.
             615          (59) "Life science establishment" means an establishment in this state that is classified
             616      under the following NAICS codes of the 2007 North American Industry Classification System



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             617
     of the federal Executive Office of the President, Office of Management and Budget:
             618          (a) NAICS Code 33911, Medical Equipment and Supplies Manufacturing;
             619          (b) NAICS Code 334510, Electromedical and Electrotherapeutic Apparatus
             620      Manufacturing; or
             621          (c) NAICS Code 334517, Irradiation Apparatus Manufacturing.
             622          (60) "Life science research and development facility" means a facility owned, leased,
             623      or rented by a life science establishment if research and development is performed in 51% or
             624      more of the total area of the facility.
             625          (61) "Load and leave" means delivery to a purchaser by use of a tangible storage media
             626      if the tangible storage media is not physically transferred to the purchaser.
             627          (62) "Local taxing jurisdiction" means a:
             628          (a) county that is authorized to impose an agreement sales and use tax;
             629          (b) city that is authorized to impose an agreement sales and use tax; or
             630          (c) town that is authorized to impose an agreement sales and use tax.
             631          (63) "Manufactured home" is as defined in Section 15A-1-302 .
             632          (64) [For purposes of Section 59-12-104 , "manufacturing] "Manufacturing facility"
             633      means:
             634          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
             635      Industrial Classification Manual of the federal Executive Office of the President, Office of
             636      Management and Budget;
             637          (b) a scrap recycler if:
             638          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             639      one or more of the following items into prepared grades of processed materials for use in new
             640      products:
             641          (A) iron;
             642          (B) steel;
             643          (C) nonferrous metal;
             644          (D) paper;
             645          (E) glass;
             646          (F) plastic;
             647          (G) textile; or



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             648
         (H) rubber; and
             649          (ii) the new products under Subsection (64)(b)(i) would otherwise be made with
             650      nonrecycled materials; or
             651          (c) a cogeneration facility as defined in Section 54-2-1 if the cogeneration facility is
             652      placed in service on or after May 1, 2006.
             653          (65) "Member of the immediate family of the producer" means a person who is related
             654      to a producer described in Subsection 59-12-104 (20)(a) as a:
             655          (a) child or stepchild, regardless of whether the child or stepchild is:
             656          (i) an adopted child or adopted stepchild; or
             657          (ii) a foster child or foster stepchild;
             658          (b) grandchild or stepgrandchild;
             659          (c) grandparent or stepgrandparent;
             660          (d) nephew or stepnephew;
             661          (e) niece or stepniece;
             662          (f) parent or stepparent;
             663          (g) sibling or stepsibling;
             664          (h) spouse;
             665          (i) person who is the spouse of a person described in Subsections (65)(a) through (g);
             666      or
             667          (j) person similar to a person described in Subsections (65)(a) through (i) as
             668      determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             669      Administrative Rulemaking Act.
             670          (66) "Mobile home" is as defined in Section 15A-1-302 .
             671          (67) "Mobile telecommunications service" is as defined in the Mobile
             672      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             673          (68) (a) "Mobile wireless service" means a telecommunications service, regardless of
             674      the technology used, if:
             675          (i) the origination point of the conveyance, routing, or transmission is not fixed;
             676          (ii) the termination point of the conveyance, routing, or transmission is not fixed; or
             677          (iii) the origination point described in Subsection (68)(a)(i) and the termination point
             678      described in Subsection (68)(a)(ii) are not fixed.



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             679
         (b) "Mobile wireless service" includes a telecommunications service that is provided
             680      by a commercial mobile radio service provider.
             681          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             682      commission may by rule define "commercial mobile radio service provider."
             683          (69) (a) Except as provided in Subsection (69)(c), "mobility enhancing equipment"
             684      means equipment that is:
             685          (i) primarily and customarily used to provide or increase the ability to move from one
             686      place to another;
             687          (ii) appropriate for use in a:
             688          (A) home; or
             689          (B) motor vehicle; and
             690          (iii) not generally used by persons with normal mobility.
             691          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
             692      the equipment described in Subsection (69)(a).
             693          (c) "Mobility enhancing equipment" does not include:
             694          (i) a motor vehicle;
             695          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
             696      vehicle manufacturer;
             697          (iii) durable medical equipment; or
             698          (iv) a prosthetic device.
             699          (70) "Model 1 seller" means a seller registered under the agreement that has selected a
             700      certified service provider as the seller's agent to perform all of the seller's sales and use tax
             701      functions for agreement sales and use taxes other than the seller's obligation under Section
             702      59-12-124 to remit a tax on the seller's own purchases.
             703          (71) "Model 2 seller" means a seller registered under the agreement that:
             704          (a) except as provided in Subsection (71)(b), has selected a certified automated system
             705      to perform the seller's sales tax functions for agreement sales and use taxes; and
             706          (b) retains responsibility for remitting all of the sales tax:
             707          (i) collected by the seller; and
             708          (ii) to the appropriate local taxing jurisdiction.
             709          (72) (a) Subject to Subsection (72)(b), "model 3 seller" means a seller registered under



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             710
     the agreement that has:
             711          (i) sales in at least five states that are members of the agreement;
             712          (ii) total annual sales revenues of at least $500,000,000;
             713          (iii) a proprietary system that calculates the amount of tax:
             714          (A) for an agreement sales and use tax; and
             715          (B) due to each local taxing jurisdiction; and
             716          (iv) entered into a performance agreement with the governing board of the agreement.
             717          (b) For purposes of Subsection (72)(a), "model 3 seller" includes an affiliated group of
             718      sellers using the same proprietary system.
             719          (73) "Model 4 seller" means a seller that is registered under the agreement and is not a
             720      model 1 seller, model 2 seller, or model 3 seller.
             721          (74) "Modular home" means a modular unit as defined in Section 15A-1-302 .
             722          (75) "Motor vehicle" is as defined in Section 41-1a-102 .
             723          (76) "Oil sands" means impregnated bituminous sands that:
             724          (a) contain a heavy, thick form of petroleum that is released when heated, mixed with
             725      other hydrocarbons, or otherwise treated;
             726          (b) yield mixtures of liquid hydrocarbon; and
             727          (c) require further processing other than mechanical blending before becoming finished
             728      petroleum products.
             729          (77) "Oil shale" means a group of fine black to dark brown shales containing kerogen
             730      material that yields petroleum upon heating and distillation.
             731          (78) "Optional computer software maintenance contract" means a computer software
             732      maintenance contract that a customer is not obligated to purchase as a condition to the retail
             733      sale of computer software.
             734          (79) (a) "Other fuels" means products that burn independently to produce heat or
             735      energy.
             736          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             737      personal property.
             738          (80) (a) "Paging service" means a telecommunications service that provides
             739      transmission of a coded radio signal for the purpose of activating a specific pager.
             740          (b) For purposes of Subsection (80)(a), the transmission of a coded radio signal



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             741
     includes a transmission by message or sound.
             742          (81) "Pawnbroker" is as defined in Section 13-32a-102 .
             743          (82) "Pawn transaction" is as defined in Section 13-32a-102 .
             744          (83) (a) "Permanently attached to real property" means that for tangible personal
             745      property attached to real property:
             746          (i) the attachment of the tangible personal property to the real property:
             747          (A) is essential to the use of the tangible personal property; and
             748          (B) suggests that the tangible personal property will remain attached to the real
             749      property in the same place over the useful life of the tangible personal property; or
             750          (ii) if the tangible personal property is detached from the real property, the detachment
             751      would:
             752          (A) cause substantial damage to the tangible personal property; or
             753          (B) require substantial alteration or repair of the real property to which the tangible
             754      personal property is attached.
             755          (b) "Permanently attached to real property" includes:
             756          (i) the attachment of an accessory to the tangible personal property if the accessory is:
             757          (A) essential to the operation of the tangible personal property; and
             758          (B) attached only to facilitate the operation of the tangible personal property;
             759          (ii) a temporary detachment of tangible personal property from real property for a
             760      repair or renovation if the repair or renovation is performed where the tangible personal
             761      property and real property are located; or
             762          (iii) property attached to oil, gas, or water pipelines, except for the property listed in
             763      Subsection (83)(c)(iii) or (iv).
             764          (c) "Permanently attached to real property" does not include:
             765          (i) the attachment of portable or movable tangible personal property to real property if
             766      that portable or movable tangible personal property is attached to real property only for:
             767          (A) convenience;
             768          (B) stability; or
             769          (C) for an obvious temporary purpose;
             770          (ii) the detachment of tangible personal property from real property except for the
             771      detachment described in Subsection (83)(b)(ii);



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             772
         (iii) an attachment of the following tangible personal property to real property if the
             773      attachment to real property is only through a line that supplies water, electricity, gas,
             774      telecommunications, cable, or supplies a similar item as determined by the commission by rule
             775      made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
             776          (A) a computer;
             777          (B) a telephone;
             778          (C) a television; or
             779          (D) tangible personal property similar to Subsections (83)(c)(iii)(A) through (C) as
             780      determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             781      Administrative Rulemaking Act; or
             782          (iv) an item listed in Subsection (123)(c).
             783          (84) "Person" includes any individual, firm, partnership, joint venture, association,
             784      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             785      municipality, district, or other local governmental entity of the state, or any group or
             786      combination acting as a unit.
             787          (85) "Place of primary use":
             788          (a) for telecommunications service other than mobile telecommunications service,
             789      means the street address representative of where the customer's use of the telecommunications
             790      service primarily occurs, which shall be:
             791          (i) the residential street address of the customer; or
             792          (ii) the primary business street address of the customer; or
             793          (b) for mobile telecommunications service, is as defined in the Mobile
             794      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             795          (86) (a) "Postpaid calling service" means a telecommunications service a person
             796      obtains by making a payment on a call-by-call basis:
             797          (i) through the use of a:
             798          (A) bank card;
             799          (B) credit card;
             800          (C) debit card; or
             801          (D) travel card; or
             802          (ii) by a charge made to a telephone number that is not associated with the origination



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             803
     or termination of the telecommunications service.
             804          (b) "Postpaid calling service" includes a service, except for a prepaid wireless calling
             805      service, that would be a prepaid wireless calling service if the service were exclusively a
             806      telecommunications service.
             807          (87) "Postproduction" means an activity related to the finishing or duplication of a
             808      medium described in Subsection 59-12-104 (54)(a).
             809          (88) "Prepaid calling service" means a telecommunications service:
             810          (a) that allows a purchaser access to telecommunications service that is exclusively
             811      telecommunications service;
             812          (b) that:
             813          (i) is paid for in advance; and
             814          (ii) enables the origination of a call using an:
             815          (A) access number; or
             816          (B) authorization code;
             817          (c) that is dialed:
             818          (i) manually; or
             819          (ii) electronically; and
             820          (d) sold in predetermined units or dollars that decline:
             821          (i) by a known amount; and
             822          (ii) with use.
             823          (89) "Prepaid wireless calling service" means a telecommunications service:
             824          (a) that provides the right to utilize:
             825          (i) mobile wireless service; and
             826          (ii) other service that is not a telecommunications service, including:
             827          (A) the download of a product transferred electronically;
             828          (B) a content service; or
             829          (C) an ancillary service;
             830          (b) that:
             831          (i) is paid for in advance; and
             832          (ii) enables the origination of a call using an:
             833          (A) access number; or



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             834
         (B) authorization code;
             835          (c) that is dialed:
             836          (i) manually; or
             837          (ii) electronically; and
             838          (d) sold in predetermined units or dollars that decline:
             839          (i) by a known amount; and
             840          (ii) with use.
             841          (90) (a) "Prepared food" means:
             842          (i) food:
             843          (A) sold in a heated state; or
             844          (B) heated by a seller;
             845          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             846      item; or
             847          (iii) except as provided in Subsection (90)(c), food sold with an eating utensil provided
             848      by the seller, including a:
             849          (A) plate;
             850          (B) knife;
             851          (C) fork;
             852          (D) spoon;
             853          (E) glass;
             854          (F) cup;
             855          (G) napkin; or
             856          (H) straw.
             857          (b) "Prepared food" does not include:
             858          (i) food that a seller only:
             859          (A) cuts;
             860          (B) repackages; or
             861          (C) pasteurizes; or
             862          (ii) (A) the following:
             863          (I) raw egg;
             864          (II) raw fish;



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             865
         (III) raw meat;
             866          (IV) raw poultry; or
             867          (V) a food containing an item described in Subsections (90)(b)(ii)(A)(I) through (IV);
             868      and
             869          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             870      Food and Drug Administration's Food Code that a consumer cook the items described in
             871      Subsection (90)(b)(ii)(A) to prevent food borne illness; or
             872          (iii) the following if sold without eating utensils provided by the seller:
             873          (A) food and food ingredients sold by a seller if the seller's proper primary
             874      classification under the 2002 North American Industry Classification System of the federal
             875      Executive Office of the President, Office of Management and Budget, is manufacturing in
             876      Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
             877      Manufacturing;
             878          (B) food and food ingredients sold in an unheated state:
             879          (I) by weight or volume; and
             880          (II) as a single item; or
             881          (C) a bakery item, including:
             882          (I) a bagel;
             883          (II) a bar;
             884          (III) a biscuit;
             885          (IV) bread;
             886          (V) a bun;
             887          (VI) a cake;
             888          (VII) a cookie;
             889          (VIII) a croissant;
             890          (IX) a danish;
             891          (X) a donut;
             892          (XI) a muffin;
             893          (XII) a pastry;
             894          (XIII) a pie;
             895          (XIV) a roll;



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             896
         (XV) a tart;
             897          (XVI) a torte; or
             898          (XVII) a tortilla.
             899          (c) An eating utensil provided by the seller does not include the following used to
             900      transport the food:
             901          (i) a container; or
             902          (ii) packaging.
             903          (91) "Prescription" means an order, formula, or recipe that is issued:
             904          (a) (i) orally;
             905          (ii) in writing;
             906          (iii) electronically; or
             907          (iv) by any other manner of transmission; and
             908          (b) by a licensed practitioner authorized by the laws of a state.
             909          (92) (a) Except as provided in Subsection (92)(b)(ii) or (iii), "prewritten computer
             910      software" means computer software that is not designed and developed:
             911          (i) by the author or other creator of the computer software; and
             912          (ii) to the specifications of a specific purchaser.
             913          (b) "Prewritten computer software" includes:
             914          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
             915      software is not designed and developed:
             916          (A) by the author or other creator of the computer software; and
             917          (B) to the specifications of a specific purchaser;
             918          (ii) computer software designed and developed by the author or other creator of the
             919      computer software to the specifications of a specific purchaser if the computer software is sold
             920      to a person other than the purchaser; or
             921          (iii) except as provided in Subsection (92)(c), prewritten computer software or a
             922      prewritten portion of prewritten computer software:
             923          (A) that is modified or enhanced to any degree; and
             924          (B) if the modification or enhancement described in Subsection (92)(b)(iii)(A) is
             925      designed and developed to the specifications of a specific purchaser.
             926          (c) "Prewritten computer software" does not include a modification or enhancement



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             927
     described in Subsection (92)(b)(iii) if the charges for the modification or enhancement are:
             928          (i) reasonable; and
             929          (ii) subject to Subsections 59-12-103 (2)(e)(ii) and (2)(f)(i), separately stated on the
             930      invoice or other statement of price provided to the purchaser at the time of sale or later, as
             931      demonstrated by:
             932          (A) the books and records the seller keeps at the time of the transaction in the regular
             933      course of business, including books and records the seller keeps at the time of the transaction in
             934      the regular course of business for nontax purposes;
             935          (B) a preponderance of the facts and circumstances at the time of the transaction; and
             936          (C) the understanding of all of the parties to the transaction.
             937          (93) (a) "Private communication service" means a telecommunications service:
             938          (i) that entitles a customer to exclusive or priority use of one or more communications
             939      channels between or among termination points; and
             940          (ii) regardless of the manner in which the one or more communications channels are
             941      connected.
             942          (b) "Private communications service" includes the following provided in connection
             943      with the use of one or more communications channels:
             944          (i) an extension line;
             945          (ii) a station;
             946          (iii) switching capacity; or
             947          (iv) another associated service that is provided in connection with the use of one or
             948      more communications channels as defined in Section 59-12-215 .
             949          (94) (a) Except as provided in Subsection (94)(b), "product transferred electronically"
             950      means a product transferred electronically that would be subject to a tax under this chapter if
             951      that product was transferred in a manner other than electronically.
             952          (b) "Product transferred electronically" does not include:
             953          (i) an ancillary service;
             954          (ii) computer software; or
             955          (iii) a telecommunications service.
             956          (95) (a) "Prosthetic device" means a device that is worn on or in the body to:
             957          (i) artificially replace a missing portion of the body;



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             958
         (ii) prevent or correct a physical deformity or physical malfunction; or
             959          (iii) support a weak or deformed portion of the body.
             960          (b) "Prosthetic device" includes:
             961          (i) parts used in the repairs or renovation of a prosthetic device;
             962          (ii) replacement parts for a prosthetic device;
             963          (iii) a dental prosthesis; or
             964          (iv) a hearing aid.
             965          (c) "Prosthetic device" does not include:
             966          (i) corrective eyeglasses; or
             967          (ii) contact lenses.
             968          (96) (a) "Protective equipment" means an item:
             969          (i) for human wear; and
             970          (ii) that is:
             971          (A) designed as protection:
             972          (I) to the wearer against injury or disease; or
             973          (II) against damage or injury of other persons or property; and
             974          (B) not suitable for general use.
             975          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             976      commission shall make rules:
             977          (i) listing the items that constitute "protective equipment"; and
             978          (ii) that are consistent with the list of items that constitute "protective equipment"
             979      under the agreement.
             980          (97) (a) For purposes of Subsection 59-12-104 (41), "publication" means any written or
             981      printed matter, other than a photocopy:
             982          (i) regardless of:
             983          (A) characteristics;
             984          (B) copyright;
             985          (C) form;
             986          (D) format;
             987          (E) method of reproduction; or
             988          (F) source; and



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             989
         (ii) made available in printed or electronic format.
             990          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             991      commission may by rule define the term "photocopy."
             992          (98) (a) "Purchase price" and "sales price" mean the total amount of consideration:
             993          (i) valued in money; and
             994          (ii) for which tangible personal property, a product transferred electronically, or
             995      services are:
             996          (A) sold;
             997          (B) leased; or
             998          (C) rented.
             999          (b) "Purchase price" and "sales price" include:
             1000          (i) the seller's cost of the tangible personal property, a product transferred
             1001      electronically, or services sold;
             1002          (ii) expenses of the seller, including:
             1003          (A) the cost of materials used;
             1004          (B) a labor cost;
             1005          (C) a service cost;
             1006          (D) interest;
             1007          (E) a loss;
             1008          (F) the cost of transportation to the seller; or
             1009          (G) a tax imposed on the seller;
             1010          (iii) a charge by the seller for any service necessary to complete the sale; or
             1011          (iv) consideration a seller receives from a person other than the purchaser if:
             1012          (A) (I) the seller actually receives consideration from a person other than the purchaser;
             1013      and
             1014          (II) the consideration described in Subsection (98)(b)(iv)(A)(I) is directly related to a
             1015      price reduction or discount on the sale;
             1016          (B) the seller has an obligation to pass the price reduction or discount through to the
             1017      purchaser;
             1018          (C) the amount of the consideration attributable to the sale is fixed and determinable by
             1019      the seller at the time of the sale to the purchaser; and



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             1020
         (D) (I) (Aa) the purchaser presents a certificate, coupon, or other documentation to the
             1021      seller to claim a price reduction or discount; and
             1022          (Bb) a person other than the seller authorizes, distributes, or grants the certificate,
             1023      coupon, or other documentation with the understanding that the person other than the seller
             1024      will reimburse any seller to whom the certificate, coupon, or other documentation is presented;
             1025          (II) the purchaser identifies that purchaser to the seller as a member of a group or
             1026      organization allowed a price reduction or discount, except that a preferred customer card that is
             1027      available to any patron of a seller does not constitute membership in a group or organization
             1028      allowed a price reduction or discount; or
             1029          (III) the price reduction or discount is identified as a third party price reduction or
             1030      discount on the:
             1031          (Aa) invoice the purchaser receives; or
             1032          (Bb) certificate, coupon, or other documentation the purchaser presents.
             1033          (c) "Purchase price" and "sales price" do not include:
             1034          (i) a discount:
             1035          (A) in a form including:
             1036          (I) cash;
             1037          (II) term; or
             1038          (III) coupon;
             1039          (B) that is allowed by a seller;
             1040          (C) taken by a purchaser on a sale; and
             1041          (D) that is not reimbursed by a third party; or
             1042          (ii) subject to Subsections 59-12-103 (2)(e)(ii) and (2)(f)(i), the following if separately
             1043      stated on an invoice, bill of sale, or similar document provided to the purchaser at the time of
             1044      sale or later, as demonstrated by the books and records the seller keeps at the time of the
             1045      transaction in the regular course of business, including books and records the seller keeps at the
             1046      time of the transaction in the regular course of business for nontax purposes, by a
             1047      preponderance of the facts and circumstances at the time of the transaction, and by the
             1048      understanding of all of the parties to the transaction:
             1049          (A) the following from credit extended on the sale of tangible personal property or
             1050      services:



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             1051
         (I) a carrying charge;
             1052          (II) a financing charge; or
             1053          (III) an interest charge;
             1054          (B) a delivery charge;
             1055          (C) an installation charge;
             1056          (D) a manufacturer rebate on a motor vehicle; or
             1057          (E) a tax or fee legally imposed directly on the consumer.
             1058          (99) "Purchaser" means a person to whom:
             1059          (a) a sale of tangible personal property is made;
             1060          (b) a product is transferred electronically; or
             1061          (c) a service is furnished.
             1062          (100) "Regularly rented" means:
             1063          (a) rented to a guest for value three or more times during a calendar year; or
             1064          (b) advertised or held out to the public as a place that is regularly rented to guests for
             1065      value.
             1066          (101) "Rental" is as defined in Subsection (58).
             1067          (102) (a) Except as provided in Subsection (102)(b), "repairs or renovations of tangible
             1068      personal property" means:
             1069          (i) a repair or renovation of tangible personal property that is not permanently attached
             1070      to real property; or
             1071          (ii) attaching tangible personal property or a product transferred electronically to other
             1072      tangible personal property or detaching tangible personal property or a product transferred
             1073      electronically from other tangible personal property if:
             1074          (A) the other tangible personal property to which the tangible personal property or
             1075      product transferred electronically is attached or from which the tangible personal property or
             1076      product transferred electronically is detached is not permanently attached to real property; and
             1077          (B) the attachment of tangible personal property or a product transferred electronically
             1078      to other tangible personal property or detachment of tangible personal property or a product
             1079      transferred electronically from other tangible personal property is made in conjunction with a
             1080      repair or replacement of tangible personal property or a product transferred electronically.
             1081          (b) "Repairs or renovations of tangible personal property" does not include:



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             1082
         (i) attaching prewritten computer software to other tangible personal property if the
             1083      other tangible personal property to which the prewritten computer software is attached is not
             1084      permanently attached to real property; or
             1085          (ii) detaching prewritten computer software from other tangible personal property if the
             1086      other tangible personal property from which the prewritten computer software is detached is
             1087      not permanently attached to real property.
             1088          (103) "Research and development" means the process of inquiry or experimentation
             1089      aimed at the discovery of facts, devices, technologies, or applications and the process of
             1090      preparing those devices, technologies, or applications for marketing.
             1091          (104) (a) "Residential telecommunications services" means a telecommunications
             1092      service or an ancillary service that is provided to an individual for personal use:
             1093          (i) at a residential address; or
             1094          (ii) at an institution, including a nursing home or a school, if the telecommunications
             1095      service or ancillary service is provided to and paid for by the individual residing at the
             1096      institution rather than the institution.
             1097          (b) For purposes of Subsection (104)(a)(i), a residential address includes an:
             1098          (i) apartment; or
             1099          (ii) other individual dwelling unit.
             1100          (105) "Residential use" means the use in or around a home, apartment building,
             1101      sleeping quarters, and similar facilities or accommodations.
             1102          (106) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose other
             1103      than:
             1104          (a) resale;
             1105          (b) sublease; or
             1106          (c) subrent.
             1107          (107) (a) "Retailer" means any person engaged in a regularly organized business in
             1108      tangible personal property or any other taxable transaction under Subsection 59-12-103 (1), and
             1109      who is selling to the user or consumer and not for resale.
             1110          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             1111      engaged in the business of selling to users or consumers within the state.
             1112          (108) (a) "Sale" means any transfer of title, exchange, or barter, conditional or



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             1113
     otherwise, in any manner, of tangible personal property or any other taxable transaction under
             1114      Subsection 59-12-103 (1), for consideration.
             1115          (b) "Sale" includes:
             1116          (i) installment and credit sales;
             1117          (ii) any closed transaction constituting a sale;
             1118          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
             1119      chapter;
             1120          (iv) any transaction if the possession of property is transferred but the seller retains the
             1121      title as security for the payment of the price; and
             1122          (v) any transaction under which right to possession, operation, or use of any article of
             1123      tangible personal property is granted under a lease or contract and the transfer of possession
             1124      would be taxable if an outright sale were made.
             1125          (109) "Sale at retail" is as defined in Subsection (106).
             1126          (110) "Sale-leaseback transaction" means a transaction by which title to tangible
             1127      personal property or a product transferred electronically that is subject to a tax under this
             1128      chapter is transferred:
             1129          (a) by a purchaser-lessee;
             1130          (b) to a lessor;
             1131          (c) for consideration; and
             1132          (d) if:
             1133          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             1134      of the tangible personal property or product transferred electronically;
             1135          (ii) the sale of the tangible personal property or product transferred electronically to the
             1136      lessor is intended as a form of financing:
             1137          (A) for the tangible personal property or product transferred electronically; and
             1138          (B) to the purchaser-lessee; and
             1139          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             1140      is required to:
             1141          (A) capitalize the tangible personal property or product transferred electronically for
             1142      financial reporting purposes; and
             1143          (B) account for the lease payments as payments made under a financing arrangement.



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             1144
         (111) "Sales price" is as defined in Subsection (98).
             1145          (112) (a) "Sales relating to schools" means the following sales by, amounts paid to, or
             1146      amounts charged by a school:
             1147          (i) sales that are directly related to the school's educational functions or activities
             1148      including:
             1149          (A) the sale of:
             1150          (I) textbooks;
             1151          (II) textbook fees;
             1152          (III) laboratory fees;
             1153          (IV) laboratory supplies; or
             1154          (V) safety equipment;
             1155          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             1156      that:
             1157          (I) a student is specifically required to wear as a condition of participation in a
             1158      school-related event or school-related activity; and
             1159          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             1160      place of ordinary clothing;
             1161          (C) sales of the following if the net or gross revenues generated by the sales are
             1162      deposited into a school district fund or school fund dedicated to school meals:
             1163          (I) food and food ingredients; or
             1164          (II) prepared food; or
             1165          (D) transportation charges for official school activities; or
             1166          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             1167      event or school-related activity.
             1168          (b) "Sales relating to schools" does not include:
             1169          (i) bookstore sales of items that are not educational materials or supplies;
             1170          (ii) except as provided in Subsection (112)(a)(i)(B):
             1171          (A) clothing;
             1172          (B) clothing accessories or equipment;
             1173          (C) protective equipment; or
             1174          (D) sports or recreational equipment; or



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             1175
         (iii) amounts paid to or amounts charged by a school for admission to a school-related
             1176      event or school-related activity if the amounts paid or charged are passed through to a person:
             1177          (A) other than a:
             1178          (I) school;
             1179          (II) nonprofit organization authorized by a school board or a governing body of a
             1180      private school to organize and direct a competitive secondary school activity; or
             1181          (III) nonprofit association authorized by a school board or a governing body of a
             1182      private school to organize and direct a competitive secondary school activity; and
             1183          (B) that is required to collect sales and use taxes under this chapter.
             1184          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1185      commission may make rules defining the term "passed through."
             1186          (113) For purposes of this section and Section 59-12-104 , "school":
             1187          (a) means:
             1188          (i) an elementary school or a secondary school that:
             1189          (A) is a:
             1190          (I) public school; or
             1191          (II) private school; and
             1192          (B) provides instruction for one or more grades kindergarten through 12; or
             1193          (ii) a public school district; and
             1194          (b) includes the Electronic High School as defined in Section 53A-15-1002 .
             1195          (114) "Seller" means a person that makes a sale, lease, or rental of:
             1196          (a) tangible personal property;
             1197          (b) a product transferred electronically; or
             1198          (c) a service.
             1199          (115) (a) "Semiconductor fabricating, processing, research, or development materials"
             1200      means tangible personal property or a product transferred electronically if the tangible personal
             1201      property or product transferred electronically is:
             1202          (i) used primarily in the process of:
             1203          (A) (I) manufacturing a semiconductor;
             1204          (II) fabricating a semiconductor; or
             1205          (III) research or development of a:



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             1206
         (Aa) semiconductor; or
             1207          (Bb) semiconductor manufacturing process; or
             1208          (B) maintaining an environment suitable for a semiconductor; or
             1209          (ii) consumed primarily in the process of:
             1210          (A) (I) manufacturing a semiconductor;
             1211          (II) fabricating a semiconductor; or
             1212          (III) research or development of a:
             1213          (Aa) semiconductor; or
             1214          (Bb) semiconductor manufacturing process; or
             1215          (B) maintaining an environment suitable for a semiconductor.
             1216          (b) "Semiconductor fabricating, processing, research, or development materials"
             1217      includes:
             1218          (i) parts used in the repairs or renovations of tangible personal property or a product
             1219      transferred electronically described in Subsection (115)(a); or
             1220          (ii) a chemical, catalyst, or other material used to:
             1221          (A) produce or induce in a semiconductor a:
             1222          (I) chemical change; or
             1223          (II) physical change;
             1224          (B) remove impurities from a semiconductor; or
             1225          (C) improve the marketable condition of a semiconductor.
             1226          (116) "Senior citizen center" means a facility having the primary purpose of providing
             1227      services to the aged as defined in Section 62A-3-101 .
             1228          (117) (a) Subject to Subsections (117)(b) and (c), "short-term lodging consumable"
             1229      means tangible personal property that:
             1230          (i) a business that provides accommodations and services described in Subsection
             1231      59-12-103 (1)(i) purchases as part of a transaction to provide the accommodations and services
             1232      to a purchaser;
             1233          (ii) is intended to be consumed by the purchaser; and
             1234          (iii) is:
             1235          (A) included in the purchase price of the accommodations and services; and
             1236          (B) not separately stated on an invoice, bill of sale, or other similar document provided



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             1237
     to the purchaser.
             1238          (b) "Short-term lodging consumable" includes:
             1239          (i) a beverage;
             1240          (ii) a brush or comb;
             1241          (iii) a cosmetic;
             1242          (iv) a hair care product;
             1243          (v) lotion;
             1244          (vi) a magazine;
             1245          (vii) makeup;
             1246          (viii) a meal;
             1247          (ix) mouthwash;
             1248          (x) nail polish remover;
             1249          (xi) a newspaper;
             1250          (xii) a notepad;
             1251          (xiii) a pen;
             1252          (xiv) a pencil;
             1253          (xv) a razor;
             1254          (xvi) saline solution;
             1255          (xvii) a sewing kit;
             1256          (xviii) shaving cream;
             1257          (xix) a shoe shine kit;
             1258          (xx) a shower cap;
             1259          (xxi) a snack item;
             1260          (xxii) soap;
             1261          (xxiii) toilet paper;
             1262          (xxiv) a toothbrush;
             1263          (xxv) toothpaste; or
             1264          (xxvi) an item similar to Subsections (117)(b)(i) through (xxv) as the commission may
             1265      provide by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1266      Rulemaking Act.
             1267          (c) "Short-term lodging consumable" does not include:



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             1268
         (i) tangible personal property that is cleaned or washed to allow the tangible personal
             1269      property to be reused; or
             1270          (ii) a product transferred electronically.
             1271          (118) "Simplified electronic return" means the electronic return:
             1272          (a) described in Section 318(C) of the agreement; and
             1273          (b) approved by the governing board of the agreement.
             1274          (119) "Solar energy" means the sun used as the sole source of energy for producing
             1275      electricity.
             1276          (120) (a) "Sports or recreational equipment" means an item:
             1277          (i) designed for human use; and
             1278          (ii) that is:
             1279          (A) worn in conjunction with:
             1280          (I) an athletic activity; or
             1281          (II) a recreational activity; and
             1282          (B) not suitable for general use.
             1283          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1284      commission shall make rules:
             1285          (i) listing the items that constitute "sports or recreational equipment"; and
             1286          (ii) that are consistent with the list of items that constitute "sports or recreational
             1287      equipment" under the agreement.
             1288          (121) "State" means the state of Utah, its departments, and agencies.
             1289          (122) "Storage" means any keeping or retention of tangible personal property or any
             1290      other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except
             1291      sale in the regular course of business.
             1292          (123) (a) Except as provided in Subsection (123)(d) or (e), "tangible personal property"
             1293      means personal property that:
             1294          (i) may be:
             1295          (A) seen;
             1296          (B) weighed;
             1297          (C) measured;
             1298          (D) felt; or



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             1299
         (E) touched; or
             1300          (ii) is in any manner perceptible to the senses.
             1301          (b) "Tangible personal property" includes:
             1302          (i) electricity;
             1303          (ii) water;
             1304          (iii) gas;
             1305          (iv) steam; or
             1306          (v) prewritten computer software, regardless of the manner in which the prewritten
             1307      computer software is transferred.
             1308          (c) "Tangible personal property" includes the following regardless of whether the item
             1309      is attached to real property:
             1310          (i) a dishwasher;
             1311          (ii) a dryer;
             1312          (iii) a freezer;
             1313          (iv) a microwave;
             1314          (v) a refrigerator;
             1315          (vi) a stove;
             1316          (vii) a washer; or
             1317          (viii) an item similar to Subsections (123)(c)(i) through (vii) as determined by the
             1318      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1319      Rulemaking Act.
             1320          (d) "Tangible personal property" does not include a product that is transferred
             1321      electronically.
             1322          (e) "Tangible personal property" does not include the following if attached to real
             1323      property, regardless of whether the attachment to real property is only through a line that
             1324      supplies water, electricity, gas, telephone, cable, or supplies a similar item as determined by the
             1325      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1326      Rulemaking Act:
             1327          (i) a hot water heater;
             1328          (ii) a water filtration system; or
             1329          (iii) a water softener system.



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             1330
         (124) (a) "Telecommunications enabling or facilitating equipment, machinery, or
             1331      software" means an item listed in Subsection (124)(b) if that item is purchased or leased
             1332      primarily to enable or facilitate one or more of the following to function:
             1333          (i) telecommunications switching or routing equipment, machinery, or software; or
             1334          (ii) telecommunications transmission equipment, machinery, or software.
             1335          (b) The following apply to Subsection (124)(a):
             1336          (i) a pole;
             1337          (ii) software;
             1338          (iii) a supplementary power supply;
             1339          (iv) temperature or environmental equipment or machinery;
             1340          (v) test equipment;
             1341          (vi) a tower; or
             1342          (vii) equipment, machinery, or software that functions similarly to an item listed in
             1343      Subsections (124)(b)(i) through (vi) as determined by the commission by rule made in
             1344      accordance with Subsection (124)(c).
             1345          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1346      commission may by rule define what constitutes equipment, machinery, or software that
             1347      functions similarly to an item listed in Subsections (124)(b)(i) through (vi).
             1348          (125) "Telecommunications equipment, machinery, or software required for 911
             1349      service" means equipment, machinery, or software that is required to comply with 47 C.F.R.
             1350      Sec. 20.18.
             1351          (126) "Telecommunications maintenance or repair equipment, machinery, or software"
             1352      means equipment, machinery, or software purchased or leased primarily to maintain or repair
             1353      one or more of the following, regardless of whether the equipment, machinery, or software is
             1354      purchased or leased as a spare part or as an upgrade or modification to one or more of the
             1355      following:
             1356          (a) telecommunications enabling or facilitating equipment, machinery, or software;
             1357          (b) telecommunications switching or routing equipment, machinery, or software; or
             1358          (c) telecommunications transmission equipment, machinery, or software.
             1359          (127) (a) "Telecommunications service" means the electronic conveyance, routing, or
             1360      transmission of audio, data, video, voice, or any other information or signal to a point, or



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             1361
     among or between points.
             1362          (b) "Telecommunications service" includes:
             1363          (i) an electronic conveyance, routing, or transmission with respect to which a computer
             1364      processing application is used to act:
             1365          (A) on the code, form, or protocol of the content;
             1366          (B) for the purpose of electronic conveyance, routing, or transmission; and
             1367          (C) regardless of whether the service:
             1368          (I) is referred to as voice over Internet protocol service; or
             1369          (II) is classified by the Federal Communications Commission as enhanced or value
             1370      added;
             1371          (ii) an 800 service;
             1372          (iii) a 900 service;
             1373          (iv) a fixed wireless service;
             1374          (v) a mobile wireless service;
             1375          (vi) a postpaid calling service;
             1376          (vii) a prepaid calling service;
             1377          (viii) a prepaid wireless calling service; or
             1378          (ix) a private communications service.
             1379          (c) "Telecommunications service" does not include:
             1380          (i) advertising, including directory advertising;
             1381          (ii) an ancillary service;
             1382          (iii) a billing and collection service provided to a third party;
             1383          (iv) a data processing and information service if:
             1384          (A) the data processing and information service allows data to be:
             1385          (I) (Aa) acquired;
             1386          (Bb) generated;
             1387          (Cc) processed;
             1388          (Dd) retrieved; or
             1389          (Ee) stored; and
             1390          (II) delivered by an electronic transmission to a purchaser; and
             1391          (B) the purchaser's primary purpose for the underlying transaction is the processed data



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             1392
     or information;
             1393          (v) installation or maintenance of the following on a customer's premises:
             1394          (A) equipment; or
             1395          (B) wiring;
             1396          (vi) Internet access service;
             1397          (vii) a paging service;
             1398          (viii) a product transferred electronically, including:
             1399          (A) music;
             1400          (B) reading material;
             1401          (C) a ring tone;
             1402          (D) software; or
             1403          (E) video;
             1404          (ix) a radio and television audio and video programming service:
             1405          (A) regardless of the medium; and
             1406          (B) including:
             1407          (I) furnishing conveyance, routing, or transmission of a television audio and video
             1408      programming service by a programming service provider;
             1409          (II) cable service as defined in 47 U.S.C. Sec. 522(6); or
             1410          (III) audio and video programming services delivered by a commercial mobile radio
             1411      service provider as defined in 47 C.F.R. Sec. 20.3;
             1412          (x) a value-added nonvoice data service; or
             1413          (xi) tangible personal property.
             1414          (128) (a) "Telecommunications service provider" means a person that:
             1415          (i) owns, controls, operates, or manages a telecommunications service; and
             1416          (ii) engages in an activity described in Subsection (128)(a)(i) for the shared use with or
             1417      resale to any person of the telecommunications service.
             1418          (b) A person described in Subsection (128)(a) is a telecommunications service provider
             1419      whether or not the Public Service Commission of Utah regulates:
             1420          (i) that person; or
             1421          (ii) the telecommunications service that the person owns, controls, operates, or
             1422      manages.



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             1423
         (129) (a) "Telecommunications switching or routing equipment, machinery, or
             1424      software" means an item listed in Subsection (129)(b) if that item is purchased or leased
             1425      primarily for switching or routing:
             1426          (i) an ancillary service;
             1427          (ii) data communications;
             1428          (iii) voice communications; or
             1429          (iv) telecommunications service.
             1430          (b) The following apply to Subsection (129)(a):
             1431          (i) a bridge;
             1432          (ii) a computer;
             1433          (iii) a cross connect;
             1434          (iv) a modem;
             1435          (v) a multiplexer;
             1436          (vi) plug in circuitry;
             1437          (vii) a router;
             1438          (viii) software;
             1439          (ix) a switch; or
             1440          (x) equipment, machinery, or software that functions similarly to an item listed in
             1441      Subsections (129)(b)(i) through (ix) as determined by the commission by rule made in
             1442      accordance with Subsection (129)(c).
             1443          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1444      commission may by rule define what constitutes equipment, machinery, or software that
             1445      functions similarly to an item listed in Subsections (129)(b)(i) through (ix).
             1446          (130) (a) "Telecommunications transmission equipment, machinery, or software"
             1447      means an item listed in Subsection (130)(b) if that item is purchased or leased primarily for
             1448      sending, receiving, or transporting:
             1449          (i) an ancillary service;
             1450          (ii) data communications;
             1451          (iii) voice communications; or
             1452          (iv) telecommunications service.
             1453          (b) The following apply to Subsection (130)(a):



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             1454
         (i) an amplifier;
             1455          (ii) a cable;
             1456          (iii) a closure;
             1457          (iv) a conduit;
             1458          (v) a controller;
             1459          (vi) a duplexer;
             1460          (vii) a filter;
             1461          (viii) an input device;
             1462          (ix) an input/output device;
             1463          (x) an insulator;
             1464          (xi) microwave machinery or equipment;
             1465          (xii) an oscillator;
             1466          (xiii) an output device;
             1467          (xiv) a pedestal;
             1468          (xv) a power converter;
             1469          (xvi) a power supply;
             1470          (xvii) a radio channel;
             1471          (xviii) a radio receiver;
             1472          (xix) a radio transmitter;
             1473          (xx) a repeater;
             1474          (xxi) software;
             1475          (xxii) a terminal;
             1476          (xxiii) a timing unit;
             1477          (xxiv) a transformer;
             1478          (xxv) a wire; or
             1479          (xxvi) equipment, machinery, or software that functions similarly to an item listed in
             1480      Subsections (130)(b)(i) through (xxv) as determined by the commission by rule made in
             1481      accordance with Subsection (130)(c).
             1482          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1483      commission may by rule define what constitutes equipment, machinery, or software that
             1484      functions similarly to an item listed in Subsections (130)(b)(i) through (xxv).



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             1485
         (131) (a) "Textbook for a higher education course" means a textbook or other printed
             1486      material that is required for a course:
             1487          (i) offered by an institution of higher education; and
             1488          (ii) that the purchaser of the textbook or other printed material attends or will attend.
             1489          (b) "Textbook for a higher education course" includes a textbook in electronic format.
             1490          (132) "Tobacco" means:
             1491          (a) a cigarette;
             1492          (b) a cigar;
             1493          (c) chewing tobacco;
             1494          (d) pipe tobacco; or
             1495          (e) any other item that contains tobacco.
             1496          (133) "Unassisted amusement device" means an amusement device, skill device, or
             1497      ride device that is started and stopped by the purchaser or renter of the right to use or operate
             1498      the amusement device, skill device, or ride device.
             1499          (134) (a) "Use" means the exercise of any right or power over tangible personal
             1500      property, a product transferred electronically, or a service under Subsection 59-12-103 (1),
             1501      incident to the ownership or the leasing of that tangible personal property, product transferred
             1502      electronically, or service.
             1503          (b) "Use" does not include the sale, display, demonstration, or trial of tangible personal
             1504      property, a product transferred electronically, or a service in the regular course of business and
             1505      held for resale.
             1506          (135) "Value-added nonvoice data service" means a service:
             1507          (a) that otherwise meets the definition of a telecommunications service except that a
             1508      computer processing application is used to act primarily for a purpose other than conveyance,
             1509      routing, or transmission; and
             1510          (b) with respect to which a computer processing application is used to act on data or
             1511      information:
             1512          (i) code;
             1513          (ii) content;
             1514          (iii) form; or
             1515          (iv) protocol.



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             1516
         (136) (a) Subject to Subsection (136)(b), "vehicle" means the following that are
             1517      required to be titled, registered, or titled and registered:
             1518          (i) an aircraft as defined in Section 72-10-102 ;
             1519          (ii) a vehicle as defined in Section 41-1a-102 ;
             1520          (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
             1521          (iv) a vessel as defined in Section 41-1a-102 .
             1522          (b) For purposes of Subsection 59-12-104 (33) only, "vehicle" includes:
             1523          (i) a vehicle described in Subsection (136)(a); or
             1524          (ii) (A) a locomotive;
             1525          (B) a freight car;
             1526          (C) railroad work equipment; or
             1527          (D) other railroad rolling stock.
             1528          (137) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             1529      exchanging a vehicle as defined in Subsection (136).
             1530          (138) (a) "Vertical service" means an ancillary service that:
             1531          (i) is offered in connection with one or more telecommunications services; and
             1532          (ii) offers an advanced calling feature that allows a customer to:
             1533          (A) identify a caller; and
             1534          (B) manage multiple calls and call connections.
             1535          (b) "Vertical service" includes an ancillary service that allows a customer to manage a
             1536      conference bridging service.
             1537          (139) (a) "Voice mail service" means an ancillary service that enables a customer to
             1538      receive, send, or store a recorded message.
             1539          (b) "Voice mail service" does not include a vertical service that a customer is required
             1540      to have in order to utilize a voice mail service.
             1541          (140) (a) Except as provided in Subsection (140)(b), "waste energy facility" means a
             1542      facility that generates electricity:
             1543          (i) using as the primary source of energy waste materials that would be placed in a
             1544      landfill or refuse pit if it were not used to generate electricity, including:
             1545          (A) tires;
             1546          (B) waste coal;



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             1547
         (C) oil shale; or
             1548          (D) municipal solid waste; and
             1549          (ii) in amounts greater than actually required for the operation of the facility.
             1550          (b) "Waste energy facility" does not include a facility that incinerates:
             1551          (i) hospital waste as defined in 40 C.F.R. 60.51c; or
             1552          (ii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
             1553          (141) "Watercraft" means a vessel as defined in Section 73-18-2 .
             1554          (142) "Wind energy" means wind used as the sole source of energy to produce
             1555      electricity.
             1556          (143) "ZIP Code" means a Zoning Improvement Plan Code assigned to a geographic
             1557      location by the United States Postal Service.
             1558          Section 2. Section 59-12-103 (Effective 07/01/14) is amended to read:
             1559           59-12-103 (Effective 07/01/14). Sales and use tax base -- Rates -- Effective dates --
             1560      Use of sales and use tax revenues.
             1561          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
             1562      charged for the following transactions:
             1563          (a) retail sales of tangible personal property made within the state;
             1564          (b) amounts paid for:
             1565          (i) telecommunications service, other than mobile telecommunications service, that
             1566      originates and terminates within the boundaries of this state;
             1567          (ii) mobile telecommunications service that originates and terminates within the
             1568      boundaries of one state only to the extent permitted by the Mobile Telecommunications
             1569      Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
             1570          (iii) an ancillary service associated with a:
             1571          (A) telecommunications service described in Subsection (1)(b)(i); or
             1572          (B) mobile telecommunications service described in Subsection (1)(b)(ii);
             1573          (c) sales of the following for commercial use:
             1574          (i) gas;
             1575          (ii) electricity;
             1576          (iii) heat;
             1577          (iv) coal;



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             1578
         (v) fuel oil; or
             1579          (vi) other fuels;
             1580          (d) sales of the following for residential use:
             1581          (i) gas;
             1582          (ii) electricity;
             1583          (iii) heat;
             1584          (iv) coal;
             1585          (v) fuel oil; or
             1586          (vi) other fuels;
             1587          (e) sales of prepared food;
             1588          (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
             1589      user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
             1590      exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
             1591      fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
             1592      television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
             1593      driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
             1594      tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
             1595      horseback rides, sports activities, or any other amusement, entertainment, recreation,
             1596      exhibition, cultural, or athletic activity;
             1597          (g) amounts paid or charged for services for repairs or renovations of tangible personal
             1598      property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
             1599          (i) the tangible personal property; and
             1600          (ii) parts used in the repairs or renovations of the tangible personal property described
             1601      in Subsection (1)(g)(i), [whether or not] regardless of whether:
             1602          (A) any parts are actually used in the repairs or renovations of that tangible personal
             1603      property; or
             1604          (B) the particular parts used in the repairs or renovations of that tangible personal
             1605      property are exempt from a tax under this chapter;
             1606          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
             1607      assisted cleaning or washing of tangible personal property;
             1608          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court



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             1609
     accommodations and services that are regularly rented for less than 30 consecutive days;
             1610          (j) amounts paid or charged for laundry or dry cleaning services;
             1611          (k) amounts paid or charged for leases or rentals of tangible personal property if within
             1612      this state the tangible personal property is:
             1613          (i) stored;
             1614          (ii) used; or
             1615          (iii) otherwise consumed;
             1616          (l) amounts paid or charged for tangible personal property if within this state the
             1617      tangible personal property is:
             1618          (i) stored;
             1619          (ii) used; or
             1620          (iii) consumed; and
             1621          (m) amounts paid or charged for a sale:
             1622          (i) (A) of a product transferred electronically; or
             1623          (B) of a repair or renovation of a product transferred electronically; and
             1624          (ii) regardless of whether the sale provides:
             1625          (A) a right of permanent use of the product; or
             1626          (B) a right to use the product that is less than a permanent use, including a right:
             1627          (I) for a definite or specified length of time; and
             1628          (II) that terminates upon the occurrence of a condition.
             1629          (2) (a) Except as provided in Subsections (2)(b) through (e), a state tax and a local tax
             1630      is imposed on a transaction described in Subsection (1) equal to the sum of:
             1631          (i) a state tax imposed on the transaction at a tax rate equal to the sum of:
             1632          (A) 4.70%; and
             1633          (B) (I) the tax rate the state imposes in accordance with Part 18, Additional State Sales
             1634      and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
             1635      through 59-12-215 is in a county in which the state imposes the tax under Part 18, Additional
             1636      State Sales and Use Tax Act; and
             1637          (II) the tax rate the state imposes in accordance with Part 20, Supplemental State Sales
             1638      and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
             1639      through 59-12-215 is in a city, town, or the unincorporated area of a county in which the state



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             1640
     imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
             1641          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1642      transaction under this chapter other than this part.
             1643          (b) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
             1644      on a transaction described in Subsection (1)(d) equal to the sum of:
             1645          (i) a state tax imposed on the transaction at a tax rate of 2%; and
             1646          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1647      transaction under this chapter other than this part.
             1648          (c) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
             1649      on amounts paid or charged for food and food ingredients equal to the sum of:
             1650          (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
             1651      a tax rate of 1.75%; and
             1652          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1653      amounts paid or charged for food and food ingredients under this chapter other than this part.
             1654          (d) (i) For a bundled transaction that is attributable to food and food ingredients and
             1655      tangible personal property other than food and food ingredients, a state tax and a local tax is
             1656      imposed on the entire bundled transaction equal to the sum of:
             1657          (A) a state tax imposed on the entire bundled transaction equal to the sum of:
             1658          (I) the tax rate described in Subsection (2)(a)(i)(A); and
             1659          (II) (Aa) the tax rate the state imposes in accordance with Part 18, Additional State
             1660      Sales and Use Tax Act, if the location of the transaction as determined under Sections
             1661      59-12-211 through 59-12-215 is in a county in which the state imposes the tax under Part 18,
             1662      Additional State Sales and Use Tax Act; and
             1663          (Bb) the tax rate the state imposes in accordance with Part 20, Supplemental State
             1664      Sales and Use Tax Act, if the location of the transaction as determined under Sections
             1665      59-12-211 through 59-12-215 is in a city, town, or the unincorporated area of a county in which
             1666      the state imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
             1667          (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
             1668      described in Subsection (2)(a)(ii).
             1669          (ii) If an optional computer software maintenance contract is a bundled transaction that
             1670      consists of taxable and nontaxable products that are not separately itemized on an invoice or



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             1671
     similar billing document, the purchase of the optional computer software maintenance contract
             1672      is 40% taxable under this chapter and 60% nontaxable under this chapter.
             1673          (iii) Subject to Subsection (2)(d)(iv), for a bundled transaction other than a bundled
             1674      transaction described in Subsection (2)(d)(i) or (ii):
             1675          (A) if the sales price of the bundled transaction is attributable to tangible personal
             1676      property, a product, or a service that is subject to taxation under this chapter and tangible
             1677      personal property, a product, or service that is not subject to taxation under this chapter, the
             1678      entire bundled transaction is subject to taxation under this chapter unless:
             1679          (I) the seller is able to identify by reasonable and verifiable standards the tangible
             1680      personal property, product, or service that is not subject to taxation under this chapter from the
             1681      books and records the seller keeps in the seller's regular course of business; or
             1682          (II) state or federal law provides otherwise; or
             1683          (B) if the sales price of a bundled transaction is attributable to two or more items of
             1684      tangible personal property, products, or services that are subject to taxation under this chapter
             1685      at different rates, the entire bundled transaction is subject to taxation under this chapter at the
             1686      higher tax rate unless:
             1687          (I) the seller is able to identify by reasonable and verifiable standards the tangible
             1688      personal property, product, or service that is subject to taxation under this chapter at the lower
             1689      tax rate from the books and records the seller keeps in the seller's regular course of business; or
             1690          (II) state or federal law provides otherwise.
             1691          (iv) For purposes of Subsection (2)(d)(iii), books and records that a seller keeps in the
             1692      seller's regular course of business includes books and records the seller keeps in the regular
             1693      course of business for nontax purposes.
             1694          (e) (i) Except as otherwise provided in this chapter and subject to Subsections (2)(e)(ii)
             1695      and (iii), if a transaction consists of the sale, lease, or rental of tangible personal property, a
             1696      product, or a service that is subject to taxation under this chapter, and the sale, lease, or rental
             1697      of tangible personal property, other property, a product, or a service that is not subject to
             1698      taxation under this chapter, the entire transaction is subject to taxation under this chapter unless
             1699      the seller, at the time of the transaction:
             1700          (A) separately states the portion of the transaction that is not subject to taxation under
             1701      this chapter on an invoice, bill of sale, or similar document provided to the purchaser; or



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             1702
         (B) is able to identify by reasonable and verifiable standards, from the books and
             1703      records the seller keeps in the seller's regular course of business, the portion of the transaction
             1704      that is not subject to taxation under this chapter.
             1705          (ii) A purchaser and a seller may correct the taxability of a transaction if:
             1706          (A) after the transaction occurs, the purchaser and the seller discover that the portion of
             1707      the transaction that is not subject to taxation under this chapter was not separately stated on an
             1708      invoice, bill of sale, or similar document provided to the purchaser because of an error or
             1709      ignorance of the law; and
             1710          (B) the seller is able to identify by reasonable and verifiable standards, from the books
             1711      and records the seller keeps in the seller's regular course of business, the portion of the
             1712      transaction that is not subject to taxation under this chapter.
             1713          (iii) For purposes of Subsections (2)(e)(i) and (ii), books and records that a seller keeps
             1714      in the seller's regular course of business includes books and records the seller keeps in the
             1715      regular course of business for nontax purposes.
             1716          (f) (i) If the sales price of a transaction is attributable to two or more items of tangible
             1717      personal property, products, or services that are subject to taxation under this chapter at
             1718      different rates, the entire purchase is subject to taxation under this chapter at the higher tax rate
             1719      unless the seller, at the time of the transaction:
             1720          (A) separately states the items subject to taxation under this chapter at each of the
             1721      different rates on an invoice, bill of sale, or similar document provided to the purchaser; or
             1722          (B) is able to identify by reasonable and verifiable standards the tangible personal
             1723      property, product, or service that is subject to taxation under this chapter at the lower tax rate
             1724      from the books and records the seller keeps in the seller's regular course of business.
             1725          (ii) For purposes of Subsection (2)(f)(i), books and records that a seller keeps in the
             1726      seller's regular course of business includes books and records the seller keeps in the regular
             1727      course of business for nontax purposes.
             1728          (g) Subject to Subsections (2)(h) and (i), a tax rate repeal or tax rate change for a tax
             1729      rate imposed under the following shall take effect on the first day of a calendar quarter:
             1730          (i) Subsection (2)(a)(i)(A);
             1731          (ii) Subsection (2)(b)(i);
             1732          (iii) Subsection (2)(c)(i); or



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             1733
         (iv) Subsection (2)(d)(i)(A)(I).
             1734          (h) (i) A tax rate increase takes effect on the first day of the first billing period that
             1735      begins on or after the effective date of the tax rate increase if the billing period for the
             1736      transaction begins before the effective date of a tax rate increase imposed under:
             1737          (A) Subsection (2)(a)(i)(A);
             1738          (B) Subsection (2)(b)(i);
             1739          (C) Subsection (2)(c)(i); or
             1740          (D) Subsection (2)(d)(i)(A)(I).
             1741          (ii) The repeal of a tax or a tax rate decrease applies to a billing period if the billing
             1742      statement for the billing period is rendered on or after the effective date of the repeal of the tax
             1743      or the tax rate decrease imposed under:
             1744          (A) Subsection (2)(a)(i)(A);
             1745          (B) Subsection (2)(b)(i);
             1746          (C) Subsection (2)(c)(i); or
             1747          (D) Subsection (2)(d)(i)(A)(I).
             1748          (i) (i) For a tax rate described in Subsection (2)(i)(ii), if a tax due on a catalogue sale is
             1749      computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal or
             1750      change in a tax rate takes effect:
             1751          (A) on the first day of a calendar quarter; and
             1752          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
             1753          (ii) Subsection (2)(i)(i) applies to the tax rates described in the following:
             1754          (A) Subsection (2)(a)(i)(A);
             1755          (B) Subsection (2)(b)(i);
             1756          (C) Subsection (2)(c)(i); or
             1757          (D) Subsection (2)(d)(i)(A)(I).
             1758          (iii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1759      the commission may by rule define the term "catalogue sale."
             1760          (3) (a) The following state taxes shall be deposited into the General Fund:
             1761          (i) the tax imposed by Subsection (2)(a)(i)(A);
             1762          (ii) the tax imposed by Subsection (2)(b)(i);
             1763          (iii) the tax imposed by Subsection (2)(c)(i); or



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             1764
         (iv) the tax imposed by Subsection (2)(d)(i)(A)(I).
             1765          (b) The following local taxes shall be distributed to a county, city, or town as provided
             1766      in this chapter:
             1767          (i) the tax imposed by Subsection (2)(a)(ii);
             1768          (ii) the tax imposed by Subsection (2)(b)(ii);
             1769          (iii) the tax imposed by Subsection (2)(c)(ii); and
             1770          (iv) the tax imposed by Subsection (2)(d)(i)(B).
             1771          (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             1772      2003, the lesser of the following amounts shall be expended as provided in Subsections (4)(b)
             1773      through (g):
             1774          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             1775          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             1776          (B) for the fiscal year; or
             1777          (ii) $17,500,000.
             1778          (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
             1779      described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
             1780      Department of Natural Resources to:
             1781          (A) implement the measures described in Subsections 79-2-303 (3)(a) through (d) to
             1782      protect sensitive plant and animal species; or
             1783          (B) award grants, up to the amount authorized by the Legislature in an appropriations
             1784      act, to political subdivisions of the state to implement the measures described in Subsections
             1785      79-2-303 (3)(a) through (d) to protect sensitive plant and animal species.
             1786          (ii) Money transferred to the Department of Natural Resources under Subsection
             1787      (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
             1788      person to list or attempt to have listed a species as threatened or endangered under the
             1789      Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
             1790          (iii) At the end of each fiscal year:
             1791          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1792      Conservation and Development Fund created in Section 73-10-24 ;
             1793          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             1794      Program Subaccount created in Section 73-10c-5 ; and



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             1795
         (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             1796      Program Subaccount created in Section 73-10c-5 .
             1797          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
             1798      Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
             1799      created in Section 4-18-106 .
             1800          (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
             1801      in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
             1802      Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
             1803      water rights.
             1804          (ii) At the end of each fiscal year:
             1805          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1806      Conservation and Development Fund created in Section 73-10-24 ;
             1807          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             1808      Program Subaccount created in Section 73-10c-5 ; and
             1809          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             1810      Program Subaccount created in Section 73-10c-5 .
             1811          (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
             1812      in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
             1813      Fund created in Section 73-10-24 for use by the Division of Water Resources.
             1814          (ii) In addition to the uses allowed of the Water Resources Conservation and
             1815      Development Fund under Section 73-10-24 , the Water Resources Conservation and
             1816      Development Fund may also be used to:
             1817          (A) conduct hydrologic and geotechnical investigations by the Division of Water
             1818      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             1819      quantifying surface and ground water resources and describing the hydrologic systems of an
             1820      area in sufficient detail so as to enable local and state resource managers to plan for and
             1821      accommodate growth in water use without jeopardizing the resource;
             1822          (B) fund state required dam safety improvements; and
             1823          (C) protect the state's interest in interstate water compact allocations, including the
             1824      hiring of technical and legal staff.
             1825          (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described



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             1826
     in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
             1827      created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
             1828          (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             1829      in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
             1830      created in Section 73-10c-5 for use by the Division of Drinking Water to:
             1831          (i) provide for the installation and repair of collection, treatment, storage, and
             1832      distribution facilities for any public water system, as defined in Section 19-4-102 ;
             1833          (ii) develop underground sources of water, including springs and wells; and
             1834          (iii) develop surface water sources.
             1835          (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             1836      2006, the difference between the following amounts shall be expended as provided in this
             1837      Subsection (5), if that difference is greater than $1:
             1838          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
             1839      fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
             1840          (ii) $17,500,000.
             1841          (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
             1842          (A) transferred each fiscal year to the Department of Natural Resources as dedicated
             1843      credits; and
             1844          (B) expended by the Department of Natural Resources for watershed rehabilitation or
             1845      restoration.
             1846          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             1847      in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
             1848      created in Section 73-10-24 .
             1849          (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
             1850      remaining difference described in Subsection (5)(a) shall be:
             1851          (A) transferred each fiscal year to the Division of Water Resources as dedicated
             1852      credits; and
             1853          (B) expended by the Division of Water Resources for cloud-seeding projects
             1854      authorized by Title 73, Chapter 15, Modification of Weather.
             1855          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             1856      in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund



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             1857
     created in Section 73-10-24 .
             1858          (d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
             1859      remaining difference described in Subsection (5)(a) shall be deposited into the Water
             1860      Resources Conservation and Development Fund created in Section 73-10-24 for use by the
             1861      Division of Water Resources for:
             1862          (i) preconstruction costs:
             1863          (A) as defined in Subsection 73-26-103 (6) for projects authorized by Title 73, Chapter
             1864      26, Bear River Development Act; and
             1865          (B) as defined in Subsection 73-28-103 (8) for the Lake Powell Pipeline project
             1866      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
             1867          (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
             1868      Chapter 26, Bear River Development Act;
             1869          (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
             1870      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
             1871          (iv) other uses authorized under Sections 73-10-24 , 73-10-25.1 , 73-10-30 , and
             1872      Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
             1873          (e) After making the transfers required by Subsections (5)(b) and (c) and subject to
             1874      Subsection (5)(f), 6% of the remaining difference described in Subsection (5)(a) shall be
             1875      transferred each year as dedicated credits to the Division of Water Rights to cover the costs
             1876      incurred for employing additional technical staff for the administration of water rights.
             1877          (f) At the end of each fiscal year, any unexpended dedicated credits described in
             1878      Subsection (5)(e) over $150,000 lapse to the Water Resources Conservation and Development
             1879      Fund created in Section 73-10-24 .
             1880          (6) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             1881      2003, and for taxes listed under Subsection (3)(a), the amount of revenue generated by a 1/16%
             1882      tax rate on the transactions described in Subsection (1) for the fiscal year shall be deposited in
             1883      the Transportation Fund created by Section 72-2-102 .
             1884          (7) Notwithstanding Subsection (3)(a), beginning on July 1, 2012, the Division of
             1885      Finance shall deposit into the Transportation Investment Fund of 2005 created in Section
             1886      72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
             1887      by a 1/64% tax rate on the taxable transactions under Subsection (1).



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             1888
         (8) (a) Notwithstanding Subsection (3)(a), in addition to the amounts deposited in
             1889      Subsection (7), and subject to Subsection (8)(b), for a fiscal year beginning on or after July 1,
             1890      2012, the Division of Finance shall deposit into the Transportation Investment Fund of 2005
             1891      created by Section 72-2-124 :
             1892          (i) a portion of the taxes listed under Subsection (3)(a) in an amount equal to 8.3% of
             1893      the revenues collected from the following taxes, which represents a portion of the
             1894      approximately 17% of sales and use tax revenues generated annually by the sales and use tax
             1895      on vehicles and vehicle-related products:
             1896          (A) the tax imposed by Subsection (2)(a)(i)(A);
             1897          (B) the tax imposed by Subsection (2)(b)(i);
             1898          (C) the tax imposed by Subsection (2)(c)(i); and
             1899          (D) the tax imposed by Subsection (2)(d)(i)(A)(I); plus
             1900          (ii) an amount equal to 30% of the growth in the amount of revenues collected in the
             1901      current fiscal year from the sales and use taxes described in Subsections (8)(a)(i)(A) through
             1902      (D) that exceeds the amount collected from the sales and use taxes described in Subsections
             1903      (8)(a)(i)(A) through (D) in the 2010-11 fiscal year.
             1904          (b) (i) Subject to Subsections (8)(b)(ii) and (iii), in any fiscal year that the portion of
             1905      the sales and use taxes deposited under Subsection (8)(a) represents an amount that is a total
             1906      lower percentage of the sales and use taxes described in Subsections (8)(a)(i)(A) through (D)
             1907      generated in the current fiscal year than the total percentage of sales and use taxes deposited in
             1908      the previous fiscal year, the Division of Finance shall deposit an amount under Subsection
             1909      (8)(a) equal to the product of:
             1910          (A) the total percentage of sales and use taxes deposited under Subsection (8)(a) in the
             1911      previous fiscal year; and
             1912          (B) the total sales and use tax revenue generated by the taxes described in Subsections
             1913      (8)(a)(i)(A) through (D) in the current fiscal year.
             1914          (ii) In any fiscal year in which the portion of the sales and use taxes deposited under
             1915      Subsection (8)(a) would exceed 17% of the revenues collected from the sales and use taxes
             1916      described in Subsections (8)(a)(i)(A) through (D) in the current fiscal year, the Division of
             1917      Finance shall deposit 17% of the revenues collected from the sales and use taxes described in
             1918      Subsections (8)(a)(i)(A) through (D) for the current fiscal year under Subsection (8)(a).



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             1919
         (iii) In all subsequent fiscal years after a year in which 17% of the revenues collected
             1920      from the sales and use taxes described in Subsections (8)(a)(i)(A) through (D) was deposited
             1921      under Subsection (8)(a), the Division of Finance shall annually deposit 17% of the revenues
             1922      collected from the sales and use taxes described in Subsections (8)(a)(i)(A) through (D) in the
             1923      current fiscal year under Subsection (8)(a).
             1924          (9) Notwithstanding Subsection (3)(a), and in addition to the amounts deposited under
             1925      Subsections (7) and (8), for a fiscal year beginning on or after July 1, 2012, the Division of
             1926      Finance shall annually deposit $90,000,000 of the revenues generated by the taxes listed under
             1927      Subsection (3)(a) into the Transportation Investment Fund of 2005 created by Section
             1928      72-2-124 .
             1929          (10) Notwithstanding Subsection (3)(a), for each fiscal year beginning with fiscal year
             1930      2009-10, $533,750 shall be deposited into the Qualified Emergency Food Agencies Fund
             1931      created by Section 35A-8-1009 and expended as provided in Section 35A-8-1009 .
             1932          (11) (a) Notwithstanding Subsection (3)(a), except as provided in Subsection (11)(b),
             1933      and in addition to any amounts deposited under Subsections (7), (8), and (9), beginning on July
             1934      1, 2012, the Division of Finance shall deposit into the Transportation Investment Fund of 2005
             1935      created by Section 72-2-124 the amount of tax revenue generated by a .025% tax rate on the
             1936      transactions described in Subsection (1).
             1937          (b) For purposes of Subsection (11)(a), the Division of Finance may not deposit into
             1938      the Transportation Investment Fund of 2005 any tax revenue generated by amounts paid or
             1939      charged for food and food ingredients, except for tax revenue generated by a bundled
             1940      transaction attributable to food and food ingredients and tangible personal property other than
             1941      food and food ingredients described in Subsection (2)(d).
             1942          (12) (a) Notwithstanding Subsection (3)(a), and except as provided in Subsection
             1943      (12)(b), beginning on January 1, 2009, the Division of Finance shall deposit into the
             1944      Transportation Fund created by Section 72-2-102 the amount of tax revenue generated by a
             1945      .025% tax rate on the transactions described in Subsection (1) to be expended to address
             1946      chokepoints in construction management.
             1947          (b) For purposes of Subsection (12)(a), the Division of Finance may not deposit into
             1948      the Transportation Fund any tax revenue generated by amounts paid or charged for food and
             1949      food ingredients, except for tax revenue generated by a bundled transaction attributable to food



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             1950
     and food ingredients and tangible personal property other than food and food ingredients
             1951      described in Subsection (2)(d).
             1952          (13) Notwithstanding Subsections (4) through (12), an amount required to be expended
             1953      or deposited in accordance with Subsections (4) through (12) may not include an amount the
             1954      Division of Finance deposits in accordance with Section 59-12-103.2 .
             1955          Section 3. Section 59-12-104 is amended to read:
             1956           59-12-104. Exemptions.
             1957          [The following sales and uses are exempt] Exemptions from the taxes imposed by this
             1958      chapter are as follows:
             1959          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             1960      under Chapter 13, Motor and Special Fuel Tax Act;
             1961          (2) subject to Section 59-12-104.6 , sales to the state, its institutions, and its political
             1962      subdivisions; however, this exemption does not apply to sales of:
             1963          (a) construction materials except:
             1964          (i) construction materials purchased by or on behalf of institutions of the public
             1965      education system as defined in Utah Constitution Article X, Section 2, provided the
             1966      construction materials are clearly identified and segregated and installed or converted to real
             1967      property which is owned by institutions of the public education system; and
             1968          (ii) construction materials purchased by the state, its institutions, or its political
             1969      subdivisions which are installed or converted to real property by employees of the state, its
             1970      institutions, or its political subdivisions; or
             1971          (b) tangible personal property in connection with the construction, operation,
             1972      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             1973      providing additional project capacity, as defined in Section 11-13-103 ;
             1974          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             1975          (i) the proceeds of each sale do not exceed $1; and
             1976          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             1977      the cost of the item described in Subsection (3)(b) as goods consumed; and
             1978          (b) Subsection (3)(a) applies to:
             1979          (i) food and food ingredients; or
             1980          (ii) prepared food;



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             1981
         (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
             1982          (i) alcoholic beverages;
             1983          (ii) food and food ingredients; or
             1984          (iii) prepared food;
             1985          (b) sales of tangible personal property or a product transferred electronically:
             1986          (i) to a passenger;
             1987          (ii) by a commercial airline carrier; and
             1988          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
             1989          (c) services related to Subsection (4)(a) or (b);
             1990          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
             1991      and equipment:
             1992          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
             1993      North American Industry Classification System of the federal Executive Office of the
             1994      President, Office of Management and Budget; and
             1995          (II) for:
             1996          (Aa) installation in an aircraft, including services relating to the installation of parts or
             1997      equipment in the aircraft;
             1998          (Bb) renovation of an aircraft; or
             1999          (Cc) repair of an aircraft; or
             2000          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
             2001      commerce; or
             2002          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
             2003      aircraft operated by a common carrier in interstate or foreign commerce; and
             2004          (b) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             2005      a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
             2006      refund:
             2007          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
             2008          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
             2009          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
             2010      the sale prior to filing for the refund;
             2011          (iv) for sales and use taxes paid under this chapter on the sale;



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             2012
         (v) in accordance with Section 59-1-1410 ; and
             2013          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             2014      the person files for the refund on or before September 30, 2011;
             2015          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             2016      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             2017      exhibitor, distributor, or commercial television or radio broadcaster;
             2018          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             2019      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             2020      washing of tangible personal property;
             2021          (b) if a seller that sells at the same business location assisted cleaning or washing of
             2022      tangible personal property and cleaning or washing of tangible personal property that is not
             2023      assisted cleaning or washing of tangible personal property, the exemption described in
             2024      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             2025      or washing of the tangible personal property; and
             2026          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
             2027      Utah Administrative Rulemaking Act, the commission may make rules:
             2028          (i) governing the circumstances under which sales are at the same business location;
             2029      and
             2030          (ii) establishing the procedures and requirements for a seller to separately account for
             2031      sales of assisted cleaning or washing of tangible personal property;
             2032          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             2033      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             2034      fulfilled;
             2035          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             2036      this state if the vehicle is:
             2037          (a) not registered in this state; and
             2038          (b) (i) not used in this state; or
             2039          (ii) used in this state:
             2040          (A) if the vehicle is not used to conduct business, for a time period that does not
             2041      exceed the longer of:
             2042          (I) 30 days in any calendar year; or



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             2043
         (II) the time period necessary to transport the vehicle to the borders of this state; or
             2044          (B) if the vehicle is used to conduct business, for the time period necessary to transport
             2045      the vehicle to the borders of this state;
             2046          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             2047          (i) the item is intended for human use; and
             2048          (ii) (A) a prescription was issued for the item; or
             2049          (B) the item was purchased by a hospital or other medical facility; and
             2050          (b) (i) Subsection (10)(a) applies to:
             2051          (A) a drug;
             2052          (B) a syringe; or
             2053          (C) a stoma supply; and
             2054          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2055      commission may by rule define the terms:
             2056          (A) "syringe"; or
             2057          (B) "stoma supply";
             2058          (11) sales or use of property, materials, or services used in the construction of or
             2059      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             2060          (12) (a) sales of an item described in Subsection (12)(c) served by:
             2061          (i) the following if the item described in Subsection (12)(c) is not available to the
             2062      general public:
             2063          (A) a church; or
             2064          (B) a charitable institution;
             2065          (ii) an institution of higher education if:
             2066          (A) the item described in Subsection (12)(c) is not available to the general public; or
             2067          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             2068      offered by the institution of higher education; or
             2069          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             2070          (i) a medical facility; or
             2071          (ii) a nursing facility; and
             2072          (c) Subsections (12)(a) and (b) apply to:
             2073          (i) food and food ingredients;



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             2074
         (ii) prepared food; or
             2075          (iii) alcoholic beverages;
             2076          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             2077      or a product transferred electronically by a person:
             2078          (i) regardless of the number of transactions involving the sale of that tangible personal
             2079      property or product transferred electronically by that person; and
             2080          (ii) not regularly engaged in the business of selling that type of tangible personal
             2081      property or product transferred electronically;
             2082          (b) this Subsection (13) does not apply if:
             2083          (i) the sale is one of a series of sales of a character to indicate that the person is
             2084      regularly engaged in the business of selling that type of tangible personal property or product
             2085      transferred electronically;
             2086          (ii) the person holds that person out as regularly engaged in the business of selling that
             2087      type of tangible personal property or product transferred electronically;
             2088          (iii) the person sells an item of tangible personal property or product transferred
             2089      electronically that the person purchased as a sale that is exempt under Subsection (25); or
             2090          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             2091      this state in which case the tax is based upon:
             2092          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             2093      sold; or
             2094          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             2095      value of the vehicle or vessel being sold at the time of the sale as determined by the
             2096      commission; and
             2097          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2098      commission shall make rules establishing the circumstances under which:
             2099          (i) a person is regularly engaged in the business of selling a type of tangible personal
             2100      property or product transferred electronically;
             2101          (ii) a sale of tangible personal property or a product transferred electronically is one of
             2102      a series of sales of a character to indicate that a person is regularly engaged in the business of
             2103      selling that type of tangible personal property or product transferred electronically; or
             2104          (iii) a person holds that person out as regularly engaged in the business of selling a type



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             2105
     of tangible personal property or product transferred electronically;
             2106          [(14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             2107      July 1, 2006, for a purchase or lease by a manufacturing facility except for a cogeneration
             2108      facility, of the following:]
             2109          [(i) machinery and equipment that:]
             2110          [(A) are used:]
             2111          [(I) for a manufacturing facility except for a manufacturing facility that is a scrap
             2112      recycler described in Subsection 59-12-102 (64)(b):]
             2113          [(Aa) in the manufacturing process;]
             2114          [(Bb) to manufacture an item sold as tangible personal property; and]
             2115          [(Cc) beginning on July 1, 2009, in a manufacturing facility described in this
             2116      Subsection (14)(a)(i)(A)(I) in the state; or]
             2117          [(II) for a manufacturing facility that is a scrap recycler described in Subsection
             2118      59-12-102 (64)(b):]
             2119          [(Aa) to process an item sold as tangible personal property; and]
             2120          [(Bb) beginning on July 1, 2009, in a manufacturing facility described in this
             2121      Subsection (14)(a)(i)(A)(II) in the state; and]
             2122          [(B) have an economic life of three or more years; and]
             2123          [(ii) normal operating repair or replacement parts that:]
             2124          [(A) have an economic life of three or more years; and]
             2125          [(B) are used:]
             2126          [(I) for a manufacturing facility except for a manufacturing facility that is a scrap
             2127      recycler described in Subsection 59-12-102 (64)(b):]
             2128          [(Aa) in the manufacturing process; and]
             2129          [(Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(I) in the
             2130      state; or]
             2131          [(II) for a manufacturing facility that is a scrap recycler described in Subsection
             2132      59-12-102 (64)(b):]
             2133          [(Aa) to process an item sold as tangible personal property; and]
             2134          [(Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(II) in the
             2135      state;]



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Senate Committee Amendments 2-14-2014 lp/rlr
             2136
         [(b) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             2137      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             2138      of the following:]
             2139          [(i) machinery and equipment that:]
             2140          [(A) are used:]
             2141          [(I) in the manufacturing process;]
             2142          [(II) to manufacture an item sold as tangible personal property; and]
             2143          [(III) beginning on July 1, 2009, in a manufacturing facility described in this
             2144      Subsection (14)(b) in the state; and]
             2145          [(B) have an economic life of three or more years; and]
             2146          [(ii) normal operating repair or replacement parts that:]
             2147          [(A) are used:]
             2148          [(I) in the manufacturing process; and]
             2149          [(II) in a manufacturing facility described in this Subsection (14)(b) in the state; and]
             2150          [(B) have an economic life of three or more years;]
             2151          (14) (a) amounts paid or charged for a purchase or lease:
             2152          (i) by a manufacturing facility located in the state; and
             2153          (ii) of machinery, equipment, or normal operating repair or replacement parts if the
             2154      machinery, equipment, or normal operating repair or replacement parts S. have an economic life
             2154a      of three or more years and are used .S :
             2155          (A) S. [ are used ] in the manufacturing process .S to manufacture S. [ or process ] .S
             2155a      an item sold as tangible personal property; S. [ and ] or .S
             2156          (B) S. [ have an economic life of three or more years ] for a scrap recycler, to process an
             2156a      item sold as tangible personal property .S ;
             2157          [(c)] (b) amounts paid or charged for a purchase or lease [made on or after January 1,
             2158      2008,]:
             2159          (i) by an establishment:
             2160          (A) described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS Code
             2161      213113, Support Activities for Coal Mining, 213114, Support Activities for Metal Mining, or
             2162      213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining, of the 2002 North
             2163      American Industry Classification System of the federal Executive Office of the President,
             2164      Office of Management and Budget[, of the following:]; and
             2165          [(i) machinery and equipment that:]
             2166          [(A) are used:]



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             2167
         [(I) (Aa) in the production process, other than the production of real property; or]
             2168          [(Bb) in research and development; and]
             2169          [(II) beginning on July 1, 2009, in an establishment described in this Subsection (14)(c)
             2170      in the state; and]
             2171          [(B) have an economic life of three or more years; and]
             2172          [(ii) normal operating repair or replacement parts that:]
             2173          [(A) have an economic life of three or more years; and]
             2174          [(B) are used in:]
             2175          [(I) (Aa) the production process, except for the production of real property; and]
             2176          [(Bb) an establishment described in this Subsection (14)(c) in the state; or]
             2177          [(II) (Aa) research and development; and]
             2178          [(Bb) in an establishment described in this Subsection (14)(c) in the state;]
             2179          [(d) (i) amounts paid or charged for a purchase or lease made on or after July 1, 2010,
             2180      but on or before June 30, 2014, by an establishment described in NAICS Code 518112, Web
             2181      Search Portals, of the 2002 North American Industry Classification System of the federal
             2182      Executive Office of the President, Office of Management and Budget, of the following:]
             2183          [(A) machinery and equipment that:]
             2184          [(I) are used in the operation of the web search portal;]
             2185          [(II) have an economic life of three or more years; and]
             2186          [(III) are used in a new or expanding establishment described in this Subsection (14)(d)
             2187      in the state; and]
             2188          [(B) normal operating repair or replacement parts that:]
             2189          [(I) are used in the operation of the web search portal;]
             2190          [(II) have an economic life of three or more years; and]
             2191          [(III) are used in a new or expanding establishment described in this Subsection (14)(d)
             2192      in the state; or]
             2193          (B) located in the state; and
             2194          (ii) of machinery, equipment, or normal operating repair or replacement parts if the
             2195      machinery, equipment, or normal operating repair or replacement parts have an economic life
             2196      of three or more years and are used in:
             2197          (A) the production process to produce an item sold as tangible personal property;



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             2198
         (B) research and development;
             2199          (C) transporting, storing, or managing tailings, overburden, or similar waste materials
             2200      produced from mining;
             2201          (D) developing or maintaining a road, tunnel, excavation, or similar feature used in
             2202      mining; or
             2203          (E) in preventing, controlling, or reducing dust or other pollutants from mining;
             2204          [(ii)] (c) amounts paid or charged for a purchase or lease [made on or after July 1,
             2205      2014,]:
             2206          (i) by an establishment:
             2207          (A) described in NAICS Code 518112, Web Search Portals, of the 2002 North
             2208      American Industry Classification System of the federal Executive Office of the President,
             2209      Office of Management and Budget[, of the following:]; and
             2210          [(A) machinery and equipment that:]
             2211          (B) located in the state; and
             2212          (ii) of machinery, equipment, or normal operating repair or replacement parts if the
             2213      machinery, equipment, or normal operating repair or replacement parts:
             2214          [(I)] (A) are used in the operation of the web search portal; and
             2215          [(II)] (B) have an economic life of three or more years; [and]
             2216          [(B) normal operating repair or replacement parts that:]
             2217          [(I) are used in the operation of the web search portal; and]
             2218          [(II) have an economic life of three or more years;]
             2219          [(e)] (d) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter
             2220      3, Utah Administrative Rulemaking Act, the commission:
             2221          (i) shall by rule define the term "establishment"; and
             2222          (ii) may by rule define what constitutes:
             2223          (A) processing an item sold as tangible personal property;
             2224          (B) the production process, [except for the production of real property;] to produce an
             2225      item sold as tangible personal property; or
             2226          (C) research and development; [or] and
             2227          [(D) a new or expanding establishment described in Subsection (14)(d) in the state;
             2228      and]



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             2229
         [(f)] (e) on or before October 1, [2011] 2016, and every five years after October 1,
             2230      [2011] 2016, the commission shall:
             2231          (i) review the exemptions described in this Subsection (14) and make
             2232      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             2233      exemptions should be continued, modified, or repealed; and
             2234          (ii) include in its report:
             2235          (A) an estimate of the cost of the exemptions;
             2236          (B) the purpose and effectiveness of the exemptions; and
             2237          (C) the benefits of the exemptions to the state;
             2238          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             2239          (i) tooling;
             2240          (ii) special tooling;
             2241          (iii) support equipment;
             2242          (iv) special test equipment; or
             2243          (v) parts used in the repairs or renovations of tooling or equipment described in
             2244      Subsections (15)(a)(i) through (iv); and
             2245          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             2246          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             2247      performance of any aerospace or electronics industry contract with the United States
             2248      government or any subcontract under that contract; and
             2249          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             2250      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             2251      by:
             2252          (A) a government identification tag placed on the tooling, equipment, or parts; or
             2253          (B) listing on a government-approved property record if placing a government
             2254      identification tag on the tooling, equipment, or parts is impractical;
             2255          (16) sales of newspapers or newspaper subscriptions;
             2256          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
             2257      product transferred electronically traded in as full or part payment of the purchase price, except
             2258      that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
             2259      trade-ins are limited to other vehicles only, and the tax is based upon:



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             2260
         (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             2261      vehicle being traded in; or
             2262          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             2263      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             2264      commission; and
             2265          (b) Subsection (17)(a) does not apply to the following items of tangible personal
             2266      property or products transferred electronically traded in as full or part payment of the purchase
             2267      price:
             2268          (i) money;
             2269          (ii) electricity;
             2270          (iii) water;
             2271          (iv) gas; or
             2272          (v) steam;
             2273          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             2274      or a product transferred electronically used or consumed primarily and directly in farming
             2275      operations, regardless of whether the tangible personal property or product transferred
             2276      electronically:
             2277          (A) becomes part of real estate; or
             2278          (B) is installed by a:
             2279          (I) farmer;
             2280          (II) contractor; or
             2281          (III) subcontractor; or
             2282          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
             2283      product transferred electronically if the tangible personal property or product transferred
             2284      electronically is exempt under Subsection (18)(a)(i); and
             2285          (b) amounts paid or charged for the following are subject to the taxes imposed by this
             2286      chapter:
             2287          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
             2288      incidental to farming:
             2289          (I) machinery;
             2290          (II) equipment;



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             2291
         (III) materials; or
             2292          (IV) supplies; and
             2293          (B) tangible personal property that is considered to be used in a manner that is
             2294      incidental to farming includes:
             2295          (I) hand tools; or
             2296          (II) maintenance and janitorial equipment and supplies;
             2297          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
             2298      transferred electronically if the tangible personal property or product transferred electronically
             2299      is used in an activity other than farming; and
             2300          (B) tangible personal property or a product transferred electronically that is considered
             2301      to be used in an activity other than farming includes:
             2302          (I) office equipment and supplies; or
             2303          (II) equipment and supplies used in:
             2304          (Aa) the sale or distribution of farm products;
             2305          (Bb) research; or
             2306          (Cc) transportation; or
             2307          (iii) a vehicle required to be registered by the laws of this state during the period
             2308      ending two years after the date of the vehicle's purchase;
             2309          (19) sales of hay;
             2310          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             2311      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             2312      garden, farm, or other agricultural produce is sold by:
             2313          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             2314      agricultural produce;
             2315          (b) an employee of the producer described in Subsection (20)(a); or
             2316          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             2317          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             2318      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             2319          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             2320      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             2321      wholesaler, or retailer for use in packaging tangible personal property to be sold by that



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             2322
     manufacturer, processor, wholesaler, or retailer;
             2323          (23) a product stored in the state for resale;
             2324          (24) (a) purchases of a product if:
             2325          (i) the product is:
             2326          (A) purchased outside of this state;
             2327          (B) brought into this state:
             2328          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             2329          (II) by a nonresident person who is not living or working in this state at the time of the
             2330      purchase;
             2331          (C) used for the personal use or enjoyment of the nonresident person described in
             2332      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             2333          (D) not used in conducting business in this state; and
             2334          (ii) for:
             2335          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
             2336      the product for a purpose for which the product is designed occurs outside of this state;
             2337          (B) a boat, the boat is registered outside of this state; or
             2338          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             2339      outside of this state;
             2340          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             2341          (i) a lease or rental of a product; or
             2342          (ii) a sale of a vehicle exempt under Subsection (33); and
             2343          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             2344      purposes of Subsection (24)(a), the commission may by rule define what constitutes the
             2345      following:
             2346          (i) conducting business in this state if that phrase has the same meaning in this
             2347      Subsection (24) as in Subsection (63);
             2348          (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
             2349      as in Subsection (63); or
             2350          (iii) a purpose for which a product is designed if that phrase has the same meaning in
             2351      this Subsection (24) as in Subsection (63);
             2352          (25) a product purchased for resale in this state, in the regular course of business, either



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             2353
     in its original form or as an ingredient or component part of a manufactured or compounded
             2354      product;
             2355          (26) a product upon which a sales or use tax was paid to some other state, or one of its
             2356      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             2357      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             2358      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             2359      Act;
             2360          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             2361      person for use in compounding a service taxable under the subsections;
             2362          (28) purchases made in accordance with the special supplemental nutrition program for
             2363      women, infants, and children established in 42 U.S.C. Sec. 1786;
             2364          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             2365      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             2366      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             2367      Manual of the federal Executive Office of the President, Office of Management and Budget;
             2368          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             2369      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
             2370          (a) not registered in this state; and
             2371          (b) (i) not used in this state; or
             2372          (ii) used in this state:
             2373          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
             2374      time period that does not exceed the longer of:
             2375          (I) 30 days in any calendar year; or
             2376          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             2377      the borders of this state; or
             2378          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             2379      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             2380      state;
             2381          (31) sales of aircraft manufactured in Utah;
             2382          (32) amounts paid for the purchase of telecommunications service for purposes of
             2383      providing telecommunications service;



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             2384
         (33) sales, leases, or uses of the following:
             2385          (a) a vehicle by an authorized carrier; or
             2386          (b) tangible personal property that is installed on a vehicle:
             2387          (i) sold or leased to or used by an authorized carrier; and
             2388          (ii) before the vehicle is placed in service for the first time;
             2389          (34) (a) 45% of the sales price of any new manufactured home; and
             2390          (b) 100% of the sales price of any used manufactured home;
             2391          (35) sales relating to schools and fundraising sales;
             2392          (36) sales or rentals of durable medical equipment if:
             2393          (a) a person presents a prescription for the durable medical equipment; and
             2394          (b) the durable medical equipment is used for home use only;
             2395          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             2396      Section 72-11-102 ; and
             2397          (b) the commission shall by rule determine the method for calculating sales exempt
             2398      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             2399          (38) sales to a ski resort of:
             2400          (a) snowmaking equipment;
             2401          (b) ski slope grooming equipment;
             2402          (c) passenger ropeways as defined in Section 72-11-102 ; or
             2403          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             2404      described in Subsections (38)(a) through (c);
             2405          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             2406          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             2407      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             2408      59-12-102 ;
             2409          (b) if a seller that sells or rents at the same business location the right to use or operate
             2410      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             2411      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             2412      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             2413      amusement, entertainment, or recreation for the assisted amusement devices; and
             2414          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,



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             2415
     Utah Administrative Rulemaking Act, the commission may make rules:
             2416          (i) governing the circumstances under which sales are at the same business location;
             2417      and
             2418          (ii) establishing the procedures and requirements for a seller to separately account for
             2419      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
             2420      assisted amusement devices;
             2421          (41) (a) sales of photocopies by:
             2422          (i) a governmental entity; or
             2423          (ii) an entity within the state system of public education, including:
             2424          (A) a school; or
             2425          (B) the State Board of Education; or
             2426          (b) sales of publications by a governmental entity;
             2427          (42) amounts paid for admission to an athletic event at an institution of higher
             2428      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             2429      20 U.S.C. Sec. 1681 et seq.;
             2430          (43) (a) sales made to or by:
             2431          (i) an area agency on aging; or
             2432          (ii) a senior citizen center owned by a county, city, or town; or
             2433          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             2434          (44) sales or leases of semiconductor fabricating, processing, research, or development
             2435      materials regardless of whether the semiconductor fabricating, processing, research, or
             2436      development materials:
             2437          (a) actually come into contact with a semiconductor; or
             2438          (b) ultimately become incorporated into real property;
             2439          (45) an amount paid by or charged to a purchaser for accommodations and services
             2440      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             2441      59-12-104.2 ;
             2442          (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             2443      sports event registration certificate in accordance with Section 41-3-306 for the event period
             2444      specified on the temporary sports event registration certificate;
             2445          (47) (a) sales or uses of electricity, if the sales or uses are made under a tariff adopted



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             2446
     by the Public Service Commission of Utah only for purchase of electricity produced from a
             2447      new alternative energy source, as designated in the tariff by the Public Service Commission of
             2448      Utah; and
             2449          (b) the exemption under Subsection (47)(a) applies to the portion of the tariff rate a
             2450      customer pays under the tariff described in Subsection (47)(a) that exceeds the tariff rate under
             2451      the tariff described in Subsection (47)(a) that the customer would have paid absent the tariff;
             2452          (48) sales or rentals of mobility enhancing equipment if a person presents a
             2453      prescription for the mobility enhancing equipment;
             2454          (49) sales of water in a:
             2455          (a) pipe;
             2456          (b) conduit;
             2457          (c) ditch; or
             2458          (d) reservoir;
             2459          (50) sales of currency or coins that constitute legal tender of a state, the United States,
             2460      or a foreign nation;
             2461          (51) (a) sales of an item described in Subsection (51)(b) if the item:
             2462          (i) does not constitute legal tender of a state, the United States, or a foreign nation; and
             2463          (ii) has a gold, silver, or platinum content of 50% or more; and
             2464          (b) Subsection (51)(a) applies to a gold, silver, or platinum:
             2465          (i) ingot;
             2466          (ii) bar;
             2467          (iii) medallion; or
             2468          (iv) decorative coin;
             2469          (52) amounts paid on a sale-leaseback transaction;
             2470          (53) sales of a prosthetic device:
             2471          (a) for use on or in a human; and
             2472          (b) (i) for which a prescription is required; or
             2473          (ii) if the prosthetic device is purchased by a hospital or other medical facility;
             2474          (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
             2475      machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
             2476      or equipment is primarily used in the production or postproduction of the following media for



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             2477
     commercial distribution:
             2478          (i) a motion picture;
             2479          (ii) a television program;
             2480          (iii) a movie made for television;
             2481          (iv) a music video;
             2482          (v) a commercial;
             2483          (vi) a documentary; or
             2484          (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
             2485      commission by administrative rule made in accordance with Subsection (54)(d); or
             2486          (b) purchases, leases, or rentals of machinery or equipment by an establishment
             2487      described in Subsection (54)(c) that is used for the production or postproduction of the
             2488      following are subject to the taxes imposed by this chapter:
             2489          (i) a live musical performance;
             2490          (ii) a live news program; or
             2491          (iii) a live sporting event;
             2492          (c) the following establishments listed in the 1997 North American Industry
             2493      Classification System of the federal Executive Office of the President, Office of Management
             2494      and Budget, apply to Subsections (54)(a) and (b):
             2495          (i) NAICS Code 512110; or
             2496          (ii) NAICS Code 51219; and
             2497          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2498      commission may by rule:
             2499          (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
             2500      or
             2501          (ii) define:
             2502          (A) "commercial distribution";
             2503          (B) "live musical performance";
             2504          (C) "live news program"; or
             2505          (D) "live sporting event";
             2506          (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             2507      on or before June 30, 2027, of tangible personal property that:



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             2508
         (i) is leased or purchased for or by a facility that:
             2509          (A) is an alternative energy electricity production facility;
             2510          (B) is located in the state; and
             2511          (C) (I) becomes operational on or after July 1, 2004; or
             2512          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             2513      2004, as a result of the use of the tangible personal property;
             2514          (ii) has an economic life of five or more years; and
             2515          (iii) is used to make the facility or the increase in capacity of the facility described in
             2516      Subsection (55)(a)(i) operational up to the point of interconnection with an existing
             2517      transmission grid including:
             2518          (A) a wind turbine;
             2519          (B) generating equipment;
             2520          (C) a control and monitoring system;
             2521          (D) a power line;
             2522          (E) substation equipment;
             2523          (F) lighting;
             2524          (G) fencing;
             2525          (H) pipes; or
             2526          (I) other equipment used for locating a power line or pole; and
             2527          (b) this Subsection (55) does not apply to:
             2528          (i) tangible personal property used in construction of:
             2529          (A) a new alternative energy electricity production facility; or
             2530          (B) the increase in the capacity of an alternative energy electricity production facility;
             2531          (ii) contracted services required for construction and routine maintenance activities;
             2532      and
             2533          (iii) unless the tangible personal property is used or acquired for an increase in capacity
             2534      of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal property used or
             2535      acquired after:
             2536          (A) the alternative energy electricity production facility described in Subsection
             2537      (55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
             2538          (B) the increased capacity described in Subsection (55)(a)(i) is operational as described



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             2539
     in Subsection (55)(a)(iii);
             2540          (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
             2541      on or before June 30, 2027, of tangible personal property that:
             2542          (i) is leased or purchased for or by a facility that:
             2543          (A) is a waste energy production facility;
             2544          (B) is located in the state; and
             2545          (C) (I) becomes operational on or after July 1, 2004; or
             2546          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             2547      2004, as a result of the use of the tangible personal property;
             2548          (ii) has an economic life of five or more years; and
             2549          (iii) is used to make the facility or the increase in capacity of the facility described in
             2550      Subsection (56)(a)(i) operational up to the point of interconnection with an existing
             2551      transmission grid including:
             2552          (A) generating equipment;
             2553          (B) a control and monitoring system;
             2554          (C) a power line;
             2555          (D) substation equipment;
             2556          (E) lighting;
             2557          (F) fencing;
             2558          (G) pipes; or
             2559          (H) other equipment used for locating a power line or pole; and
             2560          (b) this Subsection (56) does not apply to:
             2561          (i) tangible personal property used in construction of:
             2562          (A) a new waste energy facility; or
             2563          (B) the increase in the capacity of a waste energy facility;
             2564          (ii) contracted services required for construction and routine maintenance activities;
             2565      and
             2566          (iii) unless the tangible personal property is used or acquired for an increase in capacity
             2567      described in Subsection (56)(a)(i)(C)(II), tangible personal property used or acquired after:
             2568          (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
             2569      described in Subsection (56)(a)(iii); or



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             2570
         (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
             2571      in Subsection (56)(a)(iii);
             2572          (57) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             2573      or before June 30, 2027, of tangible personal property that:
             2574          (i) is leased or purchased for or by a facility that:
             2575          (A) is located in the state;
             2576          (B) produces fuel from alternative energy, including:
             2577          (I) methanol; or
             2578          (II) ethanol; and
             2579          (C) (I) becomes operational on or after July 1, 2004; or
             2580          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
             2581      a result of the installation of the tangible personal property;
             2582          (ii) has an economic life of five or more years; and
             2583          (iii) is installed on the facility described in Subsection (57)(a)(i);
             2584          (b) this Subsection (57) does not apply to:
             2585          (i) tangible personal property used in construction of:
             2586          (A) a new facility described in Subsection (57)(a)(i); or
             2587          (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
             2588          (ii) contracted services required for construction and routine maintenance activities;
             2589      and
             2590          (iii) unless the tangible personal property is used or acquired for an increase in capacity
             2591      described in Subsection (57)(a)(i)(C)(II), tangible personal property used or acquired after:
             2592          (A) the facility described in Subsection (57)(a)(i) is operational; or
             2593          (B) the increased capacity described in Subsection (57)(a)(i) is operational;
             2594          (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
             2595      product transferred electronically to a person within this state if that tangible personal property
             2596      or product transferred electronically is subsequently shipped outside the state and incorporated
             2597      pursuant to contract into and becomes a part of real property located outside of this state;
             2598          (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
             2599      state or political entity to which the tangible personal property is shipped imposes a sales, use,
             2600      gross receipts, or other similar transaction excise tax on the transaction against which the other



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             2601
     state or political entity allows a credit for sales and use taxes imposed by this chapter; and
             2602          (c) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,
             2603      a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
             2604      refund:
             2605          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
             2606          (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
             2607      which the sale is made;
             2608          (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
             2609      sale prior to filing for the refund;
             2610          (iv) for sales and use taxes paid under this chapter on the sale;
             2611          (v) in accordance with Section 59-1-1410 ; and
             2612          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if
             2613      the person files for the refund on or before June 30, 2011;
             2614          (59) purchases:
             2615          (a) of one or more of the following items in printed or electronic format:
             2616          (i) a list containing information that includes one or more:
             2617          (A) names; or
             2618          (B) addresses; or
             2619          (ii) a database containing information that includes one or more:
             2620          (A) names; or
             2621          (B) addresses; and
             2622          (b) used to send direct mail;
             2623          (60) redemptions or repurchases of a product by a person if that product was:
             2624          (a) delivered to a pawnbroker as part of a pawn transaction; and
             2625          (b) redeemed or repurchased within the time period established in a written agreement
             2626      between the person and the pawnbroker for redeeming or repurchasing the product;
             2627          (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
             2628          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
             2629      and
             2630          (ii) has a useful economic life of one or more years; and
             2631          (b) the following apply to Subsection (61)(a):



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             2632
         (i) telecommunications enabling or facilitating equipment, machinery, or software;
             2633          (ii) telecommunications equipment, machinery, or software required for 911 service;
             2634          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             2635          (iv) telecommunications switching or routing equipment, machinery, or software; or
             2636          (v) telecommunications transmission equipment, machinery, or software;
             2637          (62) (a) beginning on July 1, 2006, and ending on June 30, 2027, purchases of tangible
             2638      personal property or a product transferred electronically that are used in the research and
             2639      development of alternative energy technology; and
             2640          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2641      commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
             2642      purchases of tangible personal property or a product transferred electronically that are used in
             2643      the research and development of alternative energy technology;
             2644          (63) (a) purchases of tangible personal property or a product transferred electronically
             2645      if:
             2646          (i) the tangible personal property or product transferred electronically is:
             2647          (A) purchased outside of this state;
             2648          (B) brought into this state at any time after the purchase described in Subsection
             2649      (63)(a)(i)(A); and
             2650          (C) used in conducting business in this state; and
             2651          (ii) for:
             2652          (A) tangible personal property or a product transferred electronically other than the
             2653      tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
             2654      for a purpose for which the property is designed occurs outside of this state; or
             2655          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             2656      outside of this state;
             2657          (b) the exemption provided for in Subsection (63)(a) does not apply to:
             2658          (i) a lease or rental of tangible personal property or a product transferred electronically;
             2659      or
             2660          (ii) a sale of a vehicle exempt under Subsection (33); and
             2661          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             2662      purposes of Subsection (63)(a), the commission may by rule define what constitutes the



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             2663
     following:
             2664          (i) conducting business in this state if that phrase has the same meaning in this
             2665      Subsection (63) as in Subsection (24);
             2666          (ii) the first use of tangible personal property or a product transferred electronically if
             2667      that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
             2668          (iii) a purpose for which tangible personal property or a product transferred
             2669      electronically is designed if that phrase has the same meaning in this Subsection (63) as in
             2670      Subsection (24);
             2671          (64) sales of disposable home medical equipment or supplies if:
             2672          (a) a person presents a prescription for the disposable home medical equipment or
             2673      supplies;
             2674          (b) the disposable home medical equipment or supplies are used exclusively by the
             2675      person to whom the prescription described in Subsection (64)(a) is issued; and
             2676          (c) the disposable home medical equipment and supplies are listed as eligible for
             2677      payment under:
             2678          (i) Title XVIII, federal Social Security Act; or
             2679          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             2680          (65) sales:
             2681          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
             2682      District Act; or
             2683          (b) of tangible personal property to a subcontractor of a public transit district, if the
             2684      tangible personal property is:
             2685          (i) clearly identified; and
             2686          (ii) installed or converted to real property owned by the public transit district;
             2687          (66) sales of construction materials:
             2688          (a) purchased on or after July 1, 2010;
             2689          (b) purchased by, on behalf of, or for the benefit of an international airport:
             2690          (i) located within a county of the first class; and
             2691          (ii) that has a United States customs office on its premises; and
             2692          (c) if the construction materials are:
             2693          (i) clearly identified;



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             2694
         (ii) segregated; and
             2695          (iii) installed or converted to real property:
             2696          (A) owned or operated by the international airport described in Subsection (66)(b); and
             2697          (B) located at the international airport described in Subsection (66)(b);
             2698          (67) sales of construction materials:
             2699          (a) purchased on or after July 1, 2008;
             2700          (b) purchased by, on behalf of, or for the benefit of a new airport:
             2701          (i) located within a county of the second class; and
             2702          (ii) that is owned or operated by a city in which an airline as defined in Section
             2703      59-2-102 is headquartered; and
             2704          (c) if the construction materials are:
             2705          (i) clearly identified;
             2706          (ii) segregated; and
             2707          (iii) installed or converted to real property:
             2708          (A) owned or operated by the new airport described in Subsection (67)(b);
             2709          (B) located at the new airport described in Subsection (67)(b); and
             2710          (C) as part of the construction of the new airport described in Subsection (67)(b);
             2711          (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
             2712          (69) purchases and sales described in Section 63H-4-111 ;
             2713          (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
             2714      overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
             2715      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             2716      lists a state or country other than this state as the location of registry of the fixed wing turbine
             2717      powered aircraft; or
             2718          (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
             2719      provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
             2720      a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
             2721      lists a state or country other than this state as the location of registry of the fixed wing turbine
             2722      powered aircraft;
             2723          (71) subject to Section 59-12-104.4 , sales of a textbook for a higher education course:
             2724          (a) to a person admitted to an institution of higher education; and



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             2725
         (b) by a seller, other than a bookstore owned by an institution of higher education, if
             2726      51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
             2727      textbook for a higher education course;
             2728          (72) a license fee or tax a municipality imposes in accordance with Subsection
             2729      10-1-203 (5) on a purchaser from a business for which the municipality provides an enhanced
             2730      level of municipal services;
             2731          (73) amounts paid or charged for construction materials used in the construction of a
             2732      new or expanding life science research and development facility in the state, if the construction
             2733      materials are:
             2734          (a) clearly identified;
             2735          (b) segregated; and
             2736          (c) installed or converted to real property;
             2737          (74) amounts paid or charged for:
             2738          (a) a purchase or lease of machinery and equipment that:
             2739          (i) are used in performing qualified research:
             2740          (A) as defined in Section 59-7-612 ;
             2741          (B) in the state; and
             2742          (C) with respect to which the purchaser pays or incurs a qualified research expense as
             2743      defined in Section 59-7-612 ; and
             2744          (ii) have an economic life of three or more years; and
             2745          (b) normal operating repair or replacement parts:
             2746          (i) for the machinery and equipment described in Subsection (74)(a); and
             2747          (ii) that have an economic life of three or more years;
             2748          (75) a sale or lease of tangible personal property used in the preparation of prepared
             2749      food if:
             2750          (a) for a sale:
             2751          (i) the ownership of the seller and the ownership of the purchaser are identical; and
             2752          (ii) the seller or the purchaser paid a tax under this chapter on the purchase of that
             2753      tangible personal property prior to making the sale; or
             2754          (b) for a lease:
             2755          (i) the ownership of the lessor and the ownership of the lessee are identical; and



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             2756
         (ii) the lessor or the lessee paid a tax under this chapter on the purchase of that tangible
             2757      personal property prior to making the lease;
             2758          (76) (a) purchases of machinery or equipment if:
             2759          (i) the purchaser is an establishment described in NAICS Subsector 713, Amusement,
             2760      Gambling, and Recreation Industries, of the 2012 North American Industry Classification
             2761      System of the federal Executive Office of the President, Office of Management and Budget;
             2762          (ii) the machinery or equipment:
             2763          (A) has an economic life of three or more years; and
             2764          (B) is used by one or more persons who pay admission or user fees described in
             2765      Subsection 59-12-103 (1)(f) to the purchaser of the machinery and equipment; and
             2766          (iii) 51% or more of the purchaser's sales revenue for the previous calendar quarter is:
             2767          (A) amounts paid or charged as admission or user fees described in Subsection
             2768      59-12-103 (1)(f); and
             2769          (B) subject to taxation under this chapter;
             2770          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2771      commission may make rules for verifying that 51% of a purchaser's sales revenue for the
             2772      previous calendar quarter is:
             2773          (i) amounts paid or charged as admission or user fees described in Subsection
             2774      59-12-103 (1)(f); and
             2775          (ii) subject to taxation under this chapter; and
             2776          (c) on or before the November 2018 interim meeting, and every five years after the
             2777      November 2018 interim meeting, the commission shall review the exemption provided in this
             2778      Subsection (76) and report to the Revenue and Taxation Interim Committee on:
             2779          (i) the revenue lost to the state and local taxing jurisdictions as a result of the
             2780      exemption;
             2781          (ii) the purpose and effectiveness of the exemption; and
             2782          (iii) whether the exemption benefits the state;
             2783          (77) purchases of a short-term lodging consumable by a business that provides
             2784      accommodations and services described in Subsection 59-12-103 (1)(i);
             2785          (78) amounts paid or charged to access a database:
             2786          (a) if the primary purpose for accessing the database is to view or retrieve information



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             2787
     from the database; and
             2788          (b) not including amounts paid or charged for a:
             2789          (i) digital audiowork;
             2790          (ii) digital audio-visual work; or
             2791          (iii) digital book;
             2792          (79) amounts paid or charged for a purchase or lease made by an electronic financial
             2793      payment service, of:
             2794          (a) machinery and equipment that:
             2795          (i) are used in the operation of the electronic financial payment service; and
             2796          (ii) have an economic life of three or more years; and
             2797          (b) normal operating repair or replacement parts that:
             2798          (i) are used in the operation of the electronic financial payment service; and
             2799          (ii) have an economic life of three or more years; and
             2800          (80) beginning on April 1, 2013, sales of a fuel cell as defined in Section 54-15-102 .
             2801          Section 4. Effective date.
             2802          This bill takes effect on July 1, 2014.





Legislative Review Note
    as of 2-7-14 12:18 PM


Office of Legislative Research and General Counsel


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