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7 LONG TITLE
8 General Description:
9 This bill amends provisions related to sales and use taxes.
10 Highlighted Provisions:
11 This bill:
12 ▸ defines terms;
13 ▸ addresses the circumstances under which a person may be required to collect and
14 remit sales and use taxes to the State Tax Commission; and
15 ▸ makes technical and conforming changes.
16 Money Appropriated in this Bill:
17 None
18 Other Special Clauses:
19 This bill provides a special effective date.
20 Utah Code Sections Affected:
21 AMENDS:
22 59-1-401, as last amended by Laws of Utah 2014, Chapter 52
23 59-12-103.1, as last amended by Laws of Utah 2013, Chapter 150
24 59-12-107, as last amended by Laws of Utah 2012, Chapters 178, 312, and 399
25 59-12-108, as last amended by Laws of Utah 2013, Chapter 50
26 59-12-211, as last amended by Laws of Utah 2012, Chapter 312
27 59-12-211.1, as last amended by Laws of Utah 2012, Chapter 312
28
29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 59-1-401 is amended to read:
31 59-1-401. Definitions -- Offenses and penalties -- Rulemaking authority -- Statute
32 of limitations -- Commission authority to waive, reduce, or compromise penalty or
33 interest.
34 (1) As used in this section:
35 (a) "Activated tax, fee, or charge" means a tax, fee, or charge with respect to which the
36 commission:
37 (i) has implemented the commission's GenTax system; and
38 (ii) at least 30 days before implementing the commission's GenTax system as described
39 in Subsection (1)(a)(i), has provided notice in a conspicuous place on the commission's website
40 stating:
41 (A) the date the commission will implement the GenTax system with respect to the tax,
42 fee, or charge; and
43 (B) that, at the time the commission implements the GenTax system with respect to the
44 tax, fee, or charge:
45 (I) a person that files a return after the due date as described in Subsection (2)(a) is
46 subject to the penalty described in Subsection (2)(c)(ii); and
47 (II) a person that fails to pay the tax, fee, or charge as described in Subsection (3)(a) is
48 subject to the penalty described in Subsection (3)(b)(ii).
49 (b) "Activation date for a tax, fee, or charge" means with respect to a tax, fee, or
50 charge, the later of:
51 (i) the date on which the commission implements the commission's GenTax system
52 with respect to the tax, fee, or charge; or
53 (ii) 30 days after the date the commission provides the notice described in Subsection
54 (1)(a)(ii) with respect to the tax, fee, or charge.
55 (c) (i) Except as provided in Subsection (1)(c)(ii), "tax, fee, or charge" means:
56 (A) a tax, fee, or charge the commission administers under:
57 (I) this title;
58 (II) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
59 (III) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
60 (IV) Section 19-6-410.5;
61 (V) Section 19-6-714;
62 (VI) Section 19-6-805;
63 (VII) Section 32B-2-304;
64 (VIII) Section 34A-2-202;
65 (IX) Section 40-6-14;
66 (X) Section 69-2-5;
67 (XI) Section 69-2-5.5; or
68 (XII) Section 69-2-5.6; or
69 (B) another amount that by statute is subject to a penalty imposed under this section.
70 (ii) "Tax, fee, or charge" does not include a tax, fee, or charge imposed under:
71 (A) Title 41, Chapter 1a, Motor Vehicle Act, except for Section 41-1a-301;
72 (B) Title 41, Chapter 3, Motor Vehicle Business Regulation Act;
73 (C) Chapter 2, Property Tax Act, except for Section 59-2-1309;
74 (D) Chapter 3, Tax Equivalent Property Act; or
75 (E) Chapter 4, Privilege Tax.
76 (d) "Unactivated tax, fee, or charge" means a tax, fee, or charge except for an activated
77 tax, fee, or charge.
78 (2) (a) The due date for filing a return is:
79 (i) if the person filing the return is not allowed by law an extension of time for filing
80 the return, the day on which the return is due as provided by law; or
81 (ii) if the person filing the return is allowed by law an extension of time for filing the
82 return, the earlier of:
83 (A) the date the person files the return; or
84 (B) the last day of that extension of time as allowed by law.
85 (b) A penalty in the amount described in Subsection (2)(c) is imposed if a person files a
86 return after the due date described in Subsection (2)(a).
87 (c) For purposes of Subsection (2)(b), the penalty is an amount equal to the greater of:
88 (i) if the return described in Subsection (2)(b) is filed with respect to an unactivated
89 tax, fee, or charge:
90 (A) $20; or
91 (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or
92 (ii) if the return described in Subsection (2)(b) is filed with respect to an activated tax,
93 fee, or charge, beginning on the activation date for the tax, fee, or charge:
94 (A) $20; or
95 (B) (I) 2% of the unpaid activated tax, fee, or charge due on the return if the return is
96 filed no later than five days after the due date described in Subsection (2)(a);
97 (II) 5% of the unpaid activated tax, fee, or charge due on the return if the return is filed
98 more than five days after the due date but no later than 15 days after the due date described in
99 Subsection (2)(a); or
100 (III) 10% of the unpaid activated tax, fee, or charge due on the return if the return is
101 filed more than 15 days after the due date described in Subsection (2)(a).
102 (d) This Subsection (2) does not apply to:
103 (i) an amended return; or
104 (ii) a return with no tax due.
105 (3) (a) A person is subject to a penalty for failure to pay a tax, fee, or charge if:
106 (i) the person files a return on or before the due date for filing a return described in
107 Subsection (2)(a), but fails to pay the tax, fee, or charge due on the return on or before that due
108 date;
109 (ii) the person:
110 (A) is subject to a penalty under Subsection (2)(b); and
111 (B) fails to pay the tax, fee, or charge due on a return within a 90-day period after the
112 due date for filing a return described in Subsection (2)(a);
113 (iii) (A) the person is subject to a penalty under Subsection (2)(b); and
114 (B) the commission estimates an amount of tax due for that person in accordance with
115 Subsection 59-1-1406(2);
116 (iv) the person:
117 (A) is mailed a notice of deficiency; and
118 (B) within a 30-day period after the day on which the notice of deficiency described in
119 Subsection (3)(a)(iv)(A) is mailed:
120 (I) does not file a petition for redetermination or a request for agency action; and
121 (II) fails to pay the tax, fee, or charge due on a return;
122 (v) (A) the commission:
123 (I) issues an order constituting final agency action resulting from a timely filed petition
124 for redetermination or a timely filed request for agency action; or
125 (II) is considered to have denied a request for reconsideration under Subsection
126 63G-4-302(3)(b) resulting from a timely filed petition for redetermination or a timely filed
127 request for agency action; and
128 (B) the person fails to pay the tax, fee, or charge due on a return within a 30-day period
129 after the date the commission:
130 (I) issues the order constituting final agency action described in Subsection
131 (3)(a)(v)(A)(I); or
132 (II) is considered to have denied the request for reconsideration described in
133 Subsection (3)(a)(v)(A)(II); or
134 (vi) the person fails to pay the tax, fee, or charge within a 30-day period after the date
135 of a final judicial decision resulting from a timely filed petition for judicial review.
136 (b) For purposes of Subsection (3)(a), the penalty is an amount equal to the greater of:
137 (i) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
138 respect to an unactivated tax, fee, or charge:
139 (A) $20; or
140 (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or
141 (ii) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
142 respect to an activated tax, fee, or charge, beginning on the activation date:
143 (A) $20; or
144 (B) (I) 2% of the unpaid activated tax, fee, or charge due on the return if the activated
145 tax, fee, or charge due on the return is paid no later than five days after the due date for filing a
146 return described in Subsection (2)(a);
147 (II) 5% of the unpaid activated tax, fee, or charge due on the return if the activated tax,
148 fee, or charge due on the return is paid more than five days after the due date for filing a return
149 described in Subsection (2)(a) but no later than 15 days after that due date; or
150 (III) 10% of the unpaid activated tax, fee, or charge due on the return if the activated
151 tax, fee, or charge due on the return is paid more than 15 days after the due date for filing a
152 return described in Subsection (2)(a).
153 (4) (a) Beginning January 1, 1995, in the case of any underpayment of estimated tax or
154 quarterly installments required by Sections 59-5-107, 59-5-207, 59-7-504, and 59-9-104, there
155 shall be added a penalty in an amount determined by applying the interest rate provided under
156 Section 59-1-402 plus four percentage points to the amount of the underpayment for the period
157 of the underpayment.
158 (b) (i) For purposes of Subsection (4)(a), the amount of the underpayment shall be the
159 excess of the required installment over the amount, if any, of the installment paid on or before
160 the due date for the installment.
161 (ii) The period of the underpayment shall run from the due date for the installment to
162 whichever of the following dates is the earlier:
163 (A) the original due date of the tax return, without extensions, for the taxable year; or
164 (B) with respect to any portion of the underpayment, the date on which that portion is
165 paid.
166 (iii) For purposes of this Subsection (4), a payment of estimated tax shall be credited
167 against unpaid required installments in the order in which the installments are required to be
168 paid.
169 (5) (a) Notwithstanding Subsection (2) and except as provided in Subsection (6), a
170 person allowed by law an extension of time for filing a corporate franchise or income tax return
171 under Chapter 7, Corporate Franchise and Income Taxes, or an individual income tax return
172 under Chapter 10, Individual Income Tax Act, is subject to a penalty in the amount described in
173 Subsection (5)(b) if, on or before the day on which the return is due as provided by law, not
174 including the extension of time, the person fails to pay:
175 (i) for a person filing a corporate franchise or income tax return under Chapter 7,
176 Corporate Franchise and Income Taxes, the payment required by Subsection 59-7-507(1)(b); or
177 (ii) for a person filing an individual income tax return under Chapter 10, Individual
178 Income Tax Act, the payment required by Subsection 59-10-516(2).
179 (b) For purposes of Subsection (5)(a), the penalty per month during the period of the
180 extension of time for filing the return is an amount equal to 2% of the tax due on the return,
181 unpaid as of the day on which the return is due as provided by law.
182 (6) If a person does not file a return within an extension of time allowed by Section
183 59-7-505 or 59-10-516, the person:
184 (a) is not subject to a penalty in the amount described in Subsection (5)(b); and
185 (b) is subject to a penalty in an amount equal to the sum of:
186 (i) a late file penalty in an amount equal to the greater of:
187 (A) $20; or
188 (B) 10% of the tax due on the return, unpaid as of the day on which the return is due as
189 provided by law, not including the extension of time; and
190 (ii) a late pay penalty in an amount equal to the greater of:
191 (A) $20; or
192 (B) 10% of the unpaid tax due on the return, unpaid as of the day on which the return is
193 due as provided by law, not including the extension of time.
194 (7) (a) Additional penalties for an underpayment of a tax, fee, or charge are as provided
195 in this Subsection (7)(a).
196 (i) Except as provided in Subsection (7)(c), if any portion of an underpayment of a tax,
197 fee, or charge is due to negligence, the penalty is 10% of the portion of the underpayment that
198 is due to negligence.
199 (ii) Except as provided in Subsection (7)(d), if any portion of an underpayment of a
200 tax, fee, or charge is due to intentional disregard of law or rule, the penalty is 15% of the entire
201 underpayment.
202 (iii) If any portion of an underpayment is due to an intent to evade a tax, fee, or charge,
203 the penalty is the greater of $500 per period or 50% of the entire underpayment.
204 (iv) If any portion of an underpayment is due to fraud with intent to evade a tax, fee, or
205 charge, the penalty is the greater of $500 per period or 100% of the entire underpayment.
206 (b) If the commission determines that a person is liable for a penalty imposed under
207 Subsection (7)(a)(ii), (iii), or (iv), the commission shall notify the person of the proposed
208 penalty.
209 (i) The notice of proposed penalty shall:
210 (A) set forth the basis of the assessment; and
211 (B) be mailed by certified mail, postage prepaid, to the person's last-known address.
212 (ii) Upon receipt of the notice of proposed penalty, the person against whom the
213 penalty is proposed may:
214 (A) pay the amount of the proposed penalty at the place and time stated in the notice;
215 or
216 (B) proceed in accordance with the review procedures of Subsection (7)(b)(iii).
217 (iii) A person against whom a penalty is proposed in accordance with this Subsection
218 (7) may contest the proposed penalty by filing a petition for an adjudicative proceeding with
219 the commission.
220 (iv) (A) If the commission determines that a person is liable for a penalty under this
221 Subsection (7), the commission shall assess the penalty and give notice and demand for
222 payment.
223 (B) The commission shall mail the notice and demand for payment described in
224 Subsection (7)(b)(iv)(A):
225 (I) to the person's last-known address; and
226 (II) in accordance with Section 59-1-1404.
227 (c) A seller that voluntarily collects a tax under Subsection 59-12-107(2)[
228 not subject to the penalty under Subsection (7)(a)(i) if on or after July 1, 2001:
229 (i) a court of competent jurisdiction issues a final unappealable judgment or order
230 determining that:
231 (A) the seller meets one or more of the criteria described in Subsection 59-12-107(2)(a)
232 or is a seller required to pay or collect and remit sales and use taxes under Subsection
233 59-12-107(2)(b) or (d); and
234 (B) the commission or a county, city, or town may require the seller to collect a tax
235 under Subsections 59-12-103(2)(a) through (d); or
236 (ii) the commission issues a final unappealable administrative order determining that:
237 (A) the seller meets one or more of the criteria described in Subsection 59-12-107(2)(a)
238 or is a seller required to pay or collect and remit sales and use taxes under Subsection
239 59-12-107(2)(b) or (d); and
240 (B) the commission or a county, city, or town may require the seller to collect a tax
241 under Subsections 59-12-103(2)(a) through (d).
242 (d) A seller that voluntarily collects a tax under Subsection 59-12-107(2)[
243 not subject to the penalty under Subsection (7)(a)(ii) if:
244 (i) (A) a court of competent jurisdiction issues a final unappealable judgment or order
245 determining that:
246 (I) the seller meets one or more of the criteria described in Subsection 59-12-107(2)(a)
247 or is a seller required to pay or collect and remit sales and use taxes under Subsection
248 59-12-107(2)(b) or (d); and
249 (II) the commission or a county, city, or town may require the seller to collect a tax
250 under Subsections 59-12-103(2)(a) through (d); or
251 (B) the commission issues a final unappealable administrative order determining that:
252 (I) the seller meets one or more of the criteria described in Subsection 59-12-107(2)(a)
253 or is a seller required to pay or collect and remit sales and use taxes under Subsection
254 59-12-107(2)(b) or (d); and
255 (II) the commission or a county, city, or town may require the seller to collect a tax
256 under Subsections 59-12-103(2)(a) through (d); and
257 (ii) the seller's intentional disregard of law or rule is warranted by existing law or by a
258 nonfrivolous argument for the extension, modification, or reversal of existing law or the
259 establishment of new law.
260 (8) The penalty for failure to file an information return, information report, or a
261 complete supporting schedule is $50 for each information return, information report, or
262 supporting schedule up to a maximum of $1,000.
263 (9) If a person, in furtherance of a frivolous position, has a prima facie intent to delay
264 or impede administration of a law relating to a tax, fee, or charge and files a purported return
265 that fails to contain information from which the correctness of reported tax, fee, or charge
266 liability can be determined or that clearly indicates that the tax, fee, or charge liability shown is
267 substantially incorrect, the penalty is $500.
268 (10) (a) A seller that fails to remit a tax, fee, or charge monthly as required by
269 Subsection 59-12-108(1)(a):
270 (i) is subject to a penalty described in Subsection (2); and
271 (ii) may not retain the percentage of sales and use taxes that would otherwise be
272 allowable under Subsection 59-12-108(2).
273 (b) A seller that fails to remit a tax, fee, or charge by electronic funds transfer as
274 required by Subsection 59-12-108(1)(a)(ii)(B):
275 (i) is subject to a penalty described in Subsection (2); and
276 (ii) may not retain the percentage of sales and use taxes that would otherwise be
277 allowable under Subsection 59-12-108(2).
278 (11) (a) A person is subject to the penalty provided in Subsection (11)(c) if that person:
279 (i) commits an act described in Subsection (11)(b) with respect to one or more of the
280 following documents:
281 (A) a return;
282 (B) an affidavit;
283 (C) a claim; or
284 (D) a document similar to Subsections (11)(a)(i)(A) through (C);
285 (ii) knows or has reason to believe that the document described in Subsection (11)(a)(i)
286 will be used in connection with any material matter administered by the commission; and
287 (iii) knows that the document described in Subsection (11)(a)(i), if used in connection
288 with any material matter administered by the commission, would result in an understatement of
289 another person's liability for a tax, fee, or charge.
290 (b) The following acts apply to Subsection (11)(a)(i):
291 (i) preparing any portion of a document described in Subsection (11)(a)(i);
292 (ii) presenting any portion of a document described in Subsection (11)(a)(i);
293 (iii) procuring any portion of a document described in Subsection (11)(a)(i);
294 (iv) advising in the preparation or presentation of any portion of a document described
295 in Subsection (11)(a)(i);
296 (v) aiding in the preparation or presentation of any portion of a document described in
297 Subsection (11)(a)(i);
298 (vi) assisting in the preparation or presentation of any portion of a document described
299 in Subsection (11)(a)(i); or
300 (vii) counseling in the preparation or presentation of any portion of a document
301 described in Subsection (11)(a)(i).
302 (c) For purposes of Subsection (11)(a), the penalty:
303 (i) shall be imposed by the commission;
304 (ii) is $500 for each document described in Subsection (11)(a)(i) with respect to which
305 the person described in Subsection (11)(a) meets the requirements of Subsection (11)(a); and
306 (iii) is in addition to any other penalty provided by law.
307 (d) The commission may seek a court order to enjoin a person from engaging in
308 conduct that is subject to a penalty under this Subsection (11).
309 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
310 commission may make rules prescribing the documents that are similar to Subsections
311 (11)(a)(i)(A) through (C).
312 (12) (a) As provided in Section 76-8-1101, criminal offenses and penalties are as
313 provided in Subsections (12)(b) through (e).
314 (b) (i) A person who is required by this title or any laws the commission administers or
315 regulates to register with or obtain a license or permit from the commission, who operates
316 without having registered or secured a license or permit, or who operates when the registration,
317 license, or permit is expired or not current, is guilty of a class B misdemeanor.
318 (ii) Notwithstanding Section 76-3-301, for purposes of Subsection (12)(b)(i), the
319 penalty may not:
320 (A) be less than $500; or
321 (B) exceed $1,000.
322 (c) (i) With respect to a tax, fee, or charge, a person who knowingly and intentionally,
323 and without a reasonable good faith basis, fails to make, render, sign, or verify a return within
324 the time required by law or to supply information within the time required by law, or who
325 makes, renders, signs, or verifies a false or fraudulent return or statement, or who supplies false
326 or fraudulent information, is guilty of a third degree felony.
327 (ii) Notwithstanding Section 76-3-301, for purposes of Subsection (12)(c)(i), the
328 penalty may not:
329 (A) be less than $1,000; or
330 (B) exceed $5,000.
331 (d) (i) A person who intentionally or willfully attempts to evade or defeat a tax, fee, or
332 charge or the payment of a tax, fee, or charge is, in addition to other penalties provided by law,
333 guilty of a second degree felony.
334 (ii) Notwithstanding Section 76-3-301, for purposes of Subsection (12)(d)(i), the
335 penalty may not:
336 (A) be less than $1,500; or
337 (B) exceed $25,000.
338 (e) (i) A person is guilty of a second degree felony if that person commits an act:
339 (A) described in Subsection (12)(e)(ii) with respect to one or more of the following
340 documents:
341 (I) a return;
342 (II) an affidavit;
343 (III) a claim; or
344 (IV) a document similar to Subsections (12)(e)(i)(A)(I) through (III); and
345 (B) subject to Subsection (12)(e)(iii), with knowledge that the document described in
346 Subsection (12)(e)(i)(A):
347 (I) is false or fraudulent as to any material matter; and
348 (II) could be used in connection with any material matter administered by the
349 commission.
350 (ii) The following acts apply to Subsection (12)(e)(i):
351 (A) preparing any portion of a document described in Subsection (12)(e)(i)(A);
352 (B) presenting any portion of a document described in Subsection (12)(e)(i)(A);
353 (C) procuring any portion of a document described in Subsection (12)(e)(i)(A);
354 (D) advising in the preparation or presentation of any portion of a document described
355 in Subsection (12)(e)(i)(A);
356 (E) aiding in the preparation or presentation of any portion of a document described in
357 Subsection (12)(e)(i)(A);
358 (F) assisting in the preparation or presentation of any portion of a document described
359 in Subsection (12)(e)(i)(A); or
360 (G) counseling in the preparation or presentation of any portion of a document
361 described in Subsection (12)(e)(i)(A).
362 (iii) This Subsection (12)(e) applies:
363 (A) regardless of whether the person for which the document described in Subsection
364 (12)(e)(i)(A) is prepared or presented:
365 (I) knew of the falsity of the document described in Subsection (12)(e)(i)(A); or
366 (II) consented to the falsity of the document described in Subsection (12)(e)(i)(A); and
367 (B) in addition to any other penalty provided by law.
368 (iv) Notwithstanding Section 76-3-301, for purposes of this Subsection (12)(e), the
369 penalty may not:
370 (A) be less than $1,500; or
371 (B) exceed $25,000.
372 (v) The commission may seek a court order to enjoin a person from engaging in
373 conduct that is subject to a penalty under this Subsection (12)(e).
374 (vi) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
375 the commission may make rules prescribing the documents that are similar to Subsections
376 (12)(e)(i)(A)(I) through (III).
377 (f) The statute of limitations for prosecution for a violation of this Subsection (12) is
378 the later of six years:
379 (i) from the date the tax should have been remitted; or
380 (ii) after the day on which the person commits the criminal offense.
381 (13) Upon making a record of its actions, and upon reasonable cause shown, the
382 commission may waive, reduce, or compromise any of the penalties or interest imposed under
383 this part.
384 Section 2. Section 59-12-103.1 is amended to read:
385 59-12-103.1. Action by Supreme Court of the United States authorizing or action
386 by Congress permitting a state to require certain sellers to collect a sales or use tax --
387 Collection of tax by commission -- Commission report to Revenue and Taxation Interim
388 Committee -- Revenue and Taxation Interim Committee study -- Division of Finance
389 requirement to make certain deposits.
390 (1) Except as provided in Section 59-12-107.1, a seller shall remit a tax to the
391 commission as provided in Section 59-12-107 if:
392 (a) the Supreme Court of the United States issues a decision authorizing a state to
393 require the following sellers to collect a sales or use tax:
394 (i) a seller that does not meet one or more of the criteria described in Subsection
395 59-12-107(2)(a); or
396 (ii) a seller that is not a seller required to pay or collect and remit sales and use taxes
397 under Subsection 59-12-107(2)(b) or (d); or
398 (b) Congress permits the state to require the following sellers to collect a sales or use
399 tax:
400 (i) a seller that does not meet one or more of the criteria described in Subsection
401 59-12-107(2)(a); or
402 (ii) a seller that is not a seller required to pay or collect and remit sales and use taxes
403 under Subsection 59-12-107(2)(b) or (d).
404 (2) The commission shall:
405 (a) collect the tax described in Subsection (1) from the seller:
406 (i) to the extent:
407 (A) authorized by the Supreme Court of the United States; or
408 (B) permitted by Congress; and
409 (ii) beginning on the first day of a calendar quarter as prescribed by the Revenue and
410 Taxation Interim Committee; and
411 (b) make a report to the Revenue and Taxation Interim Committee:
412 (i) regarding the actions taken by:
413 (A) the Supreme Court of the United States; or
414 (B) Congress;
415 (ii) (A) stating the amount of state revenue collected at the time of the report, if any;
416 and
417 (B) estimating the state sales and use tax rate reduction that would offset the amount of
418 state revenue estimated to be collected for the current fiscal year and the next fiscal year; and
419 (iii) (A) at the Revenue and Taxation Interim Committee meeting immediately
420 following the day on which the actions of the Supreme Court of the United States or Congress
421 become effective; and
422 (B) any other meeting of the Revenue and Taxation Interim Committee as requested by
423 the chairs of the committee.
424 (3) The Revenue and Taxation Interim Committee shall after hearing the commission's
425 report under Subsection (2)(b):
426 (a) review the actions taken by:
427 (i) the Supreme Court of the United States; or
428 (ii) Congress;
429 (b) direct the commission regarding the day on which the commission is required to
430 collect the tax described in Subsection (1); and
431 (c) make recommendations to the Legislative Management Committee:
432 (i) regarding whether as a result of the actions of the Supreme Court of the United
433 States or Congress any provisions of this chapter should be amended or repealed; and
434 (ii) within a one-year period after the day on which the commission makes a report
435 under Subsection (2)(b).
436 (4) The Division of Finance shall deposit a portion of the revenue collected under this
437 section into the Remote Sales Restricted Account as required by Section 59-12-103.2.
438 Section 3. Section 59-12-107 is amended to read:
439 59-12-107. Definitions -- Collection, remittance, and payment of tax by sellers or
440 other persons -- Returns -- Reports -- Direct payment by purchaser of vehicle -- Other
441 liability for collection -- Rulemaking authority -- Credits -- Treatment of bad debt --
442 Penalties and interest.
443 (1) As used in this section:
444 (a) (i) "Advertising" means:
445 (A) announcing tangible personal property, a service, or a product transferred
446 electronically for sale by graphic, pictorial, verbal, written, or other similar means; or
447 (B) employing purchased space or time in print or electronic media if that purchased
448 space or time is given to communicate an announcement of tangible personal property, a
449 service, or a product transferred electronically for sale.
450 (ii) "Advertising" includes online advertising.
451 (b) "Affiliate" means:
452 (i) a person that is a member of the same controlled group of corporations as a seller;
453 or
454 (ii) another entity that, regardless of how the entity is organized, bears the same
455 ownership relationship to a seller as a corporation that is a member of the same controlled
456 group of corporations.
457 (c) "Controlled group of corporations" means the same as that term is defined in
458 Section 1563(a), Internal Revenue Code.
459 (d) (i) "Online advertising" means advertising that is anonymous and passive in nature.
460 (ii) "Online advertising" includes:
461 (A) an email communication generated as a result of generic algorithmic functions if
462 the email communication does not target a specific person;
463 (B) an advertisement tied to an Internet search engine;
464 (C) a banner advertisement;
465 (D) a click-through advertisement;
466 (E) a cost-per-action advertisement;
467 (F) a link to a seller's website; or
468 (G) an online advertising service similar to Subsections (1)(d)(ii)(A) through (F) as the
469 commission may define by rule made in accordance with Title 63G, Chapter 3, Utah
470 Administrative Rulemaking Act.
471 [
472 subsidiary, or affiliate.
473 [
474 (i) meets one or more of the criteria described in Subsection (2)(a)(i); and
475 (ii) delivers tangible personal property, a service, or a product transferred electronically
476 that is sold:
477 (A) by a seller that does not meet one or more of the criteria described in Subsection
478 (2)(a)(i); and
479 (B) to a purchaser in the state.
480 (g) (i) "Solicit" means to communicate directly or indirectly to a specific person within
481 the state in a manner that is intended to and calculated to incite the person to purchase tangible
482 personal property, a service, or a product transferred electronically from a specific seller.
483 (ii) "Solicit" does not include online advertising.
484 [
485 entity if that ownership interest is greater than the degree of ownership of equity interest
486 specified in 15 U.S.C. Sec. 78p, with respect to a person other than a director or an officer.
487 (2) (a) Except as provided in Subsection (2)[
488 59-12-123, and subject to Subsection (2)[
489 sales and use taxes imposed by this chapter if within this state the seller:
490 (i) has or utilizes:
491 (A) an office;
492 (B) a distribution house;
493 (C) a sales house;
494 (D) a warehouse;
495 (E) a service enterprise; or
496 (F) a place of business similar to Subsections (2)(a)(i)(A) through (E);
497 (ii) maintains a stock of goods;
498 (iii) regularly solicits orders, regardless of whether or not the orders are accepted in the
499 state, unless the seller's only activity in the state is:
500 (A) advertising; or
501 (B) [
502 (I) direct mail;
503 (II) electronic mail;
504 (III) except as provided in Subsection (2)(d), the Internet;
505 (IV) telecommunications service; or
506 (V) a means similar to Subsection (2)(a)(iii)(A) or (B);
507 (iv) regularly engages in the delivery of property in the state other than by:
508 (A) common carrier; or
509 (B) United States mail; or
510 (v) regularly engages in an activity directly related to the leasing or servicing of
511 property located within the state.
512 (b) [
513 the business of selling tangible personal property, a service, or a product transferred
514 electronically for use in the state, and shall pay or collect and remit the sales and use taxes
515 imposed by this chapter if:
516 (i) the seller:
517 (A) holds a substantial ownership interest in[
518 (B) is owned in whole or in substantial part by, a related seller; [
519 (C) is an affiliate of a seller who meets one or more of the criteria described in
520 Subsection (2)(a); and
521 (ii) (A) the seller sells the same or a substantially similar line of products as the related
522 seller and does so under the same or a substantially similar business name; [
523 (B) the place of business described in Subsection (2)(a)(i) of the related seller or an in
524 state employee of the related seller is used to advertise, promote, or facilitate sales by the seller
525 to a purchaser[
526 (C) the place of business described in Subsection (2)(a)(i) of the related seller or an
527 in-state employee of the related seller is used to deliver tangible personal property, a service, or
528 a product transferred electronically by the seller to a purchaser;
529 (D) a related seller delivers, installs, assembles, or performs maintenance services for
530 the seller's purchasers within the state;
531 (E) a related seller facilitates the seller's delivery of tangible personal property to a
532 purchaser in the state by allowing the purchaser to pick up the tangible personal property sold
533 by the seller at a location described in Subsection (2)(a)(i) that is maintained by the related
534 seller; or
535 (F) a related seller conducts another activity in the state that is significantly associated
536 with the seller's ability to establish and maintain a market in the state for the seller's sales of
537 tangible personal property, a service, or a product transferred electronically.
538 (c) For purposes of Subsection (2)(b), a presumption may be rebutted by demonstrating
539 that the activities in this state of an affiliate or a related seller are not significantly associated
540 with the seller's ability to establish and maintain a market in the state for the seller's sales of
541 tangible personal property, a service, or a product transferred electronically.
542 (d) (i) Subject to the other provisions of this Subsection (2)(d), there is a rebuttable
543 presumption that a seller is engaged in the business of selling tangible personal property, a
544 service, or a product transferred electronically in the state if:
545 (A) the seller enters into an agreement with another person in this state, for a
546 commission or other consideration, to refer a potential purchaser of the tangible personal
547 property, service, or product transferred electronically to the seller in a manner described in
548 Subsection (2)(d)(ii);
549 (B) the total taxable sales from all of the seller's sales of tangible personal property,
550 services, and products transferred electronically, for the preceding 12 months, to purchasers in
551 the state that are referred in accordance with an agreement described in Subsection (2)(d)(i)(A)
552 exceed $10,000; and
553 (C) the seller's total taxable sales of tangible personal property, services, and products
554 transferred electronically, for the preceding 12 months, to purchasers in the state, exceed
555 $125,000.
556 (ii) For purposes of Subsection (2)(d)(i), a referral:
557 (A) includes a referral made by an Internet-based link, an Internet website, or other
558 similar means; and
559 (B) does not include online advertising.
560 (iii) For purposes of Subsection (2)(d)(i), an agreement described in Subsection
561 (2)(d)(i) does not include an agreement under which a seller purchases advertising from a
562 person in the state, unless the person who enters into the agreement with the seller also solicits
563 one or more potential customers in the state as described in Subsection (2)(d)(iv).
564 (iv) For purposes of Subsection (2)(d)(iii), a person is considered to solicit one or more
565 potential customers in the state if:
566 (A) the person directs the solicitation at a resident of the state;
567 (B) the solicitation originates from within the state; and
568 (C) the solicitation is made by a person in the state.
569 (v) For purposes of Subsection (2)(d)(i), a presumption may be rebutted by proving as
570 provided in Subsection (2)(d)(vi) that a person with whom a seller has entered into an
571 agreement has not engaged in an activity within the state that is significantly associated with
572 the seller's ability to establish and maintain a market in the state, within the preceding 12
573 months, for the seller's sales of tangible personal property, a service, or a product transferred
574 electronically.
575 (vi) For purposes of Subsection (2)(d)(v), proof may be made by obtaining written
576 sworn statements:
577 (A) made in good faith;
578 (B) from all of the persons with whom the seller has entered into an agreement; and
579 (C) stating that the persons have not engaged in an activity within the state that is
580 significantly associated with the seller's ability to establish and maintain a market in the state,
581 within the preceding 12 months, for the seller's sales of tangible personal property, a service, or
582 a product transferred electronically.
583 (e) The use of a computer located in this state by a seller to create, maintain, or take an
584 order through a web page, website, Internet post, Internet listing, or online marketplace may not
585 be considered as a factor in determining whether the seller is required to pay or collect and
586 remit sales and use taxes under this Subsection (2), unless the seller owns or leases the
587 computer.
588 [
589 Subsection (2)(a) or is not a seller required to pay or collect and remit sales and use taxes under
590 Subsection (2)(b) or (d):
591 (i) except as provided in Subsection (2)[
592 (A) collect a tax on a transaction described in Subsection 59-12-103(1); and
593 (B) remit the tax to the commission as provided in this part; or
594 (ii) [
595 in Subsection 59-12-103(1) if Section 59-12-103.1 requires the seller to collect the tax.
596 [
597 registered under the agreement may not be used as a factor in determining whether that seller is
598 required by Subsection (2) to:
599 (i) pay a tax, fee, or charge under:
600 (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
601 (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
602 (C) Section 19-6-714;
603 (D) Section 19-6-805;
604 (E) Section 69-2-5;
605 (F) Section 69-2-5.5;
606 (G) Section 69-2-5.6; or
607 (H) this title; or
608 (ii) collect and remit a tax, fee, or charge under:
609 (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
610 (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
611 (C) Section 19-6-714;
612 (D) Section 19-6-805;
613 (E) Section 69-2-5;
614 (F) Section 69-2-5.5;
615 (G) Section 69-2-5.6; or
616 (H) this title.
617 [
618 described in Subsection 59-12-103(1) if:
619 (i) the seller did not collect a tax imposed by this chapter on the transaction; and
620 (ii) the person:
621 (A) stores the tangible personal property or product transferred electronically in the
622 state;
623 (B) uses the tangible personal property or product transferred electronically in the state;
624 or
625 (C) consumes the tangible personal property or product transferred electronically in the
626 state.
627 [
628 with which the retailer has contracted for printing and that consists of the final printed product,
629 property that becomes a part of the final printed product, or copy from which the printed
630 product is produced, shall not result in the retailer being considered to have or maintain an
631 office, distribution house, sales house, warehouse, service enterprise, or other place of
632 business, or to maintain a stock of goods, within this state.
633 (3) (a) Except as provided in Section 59-12-107.1, a tax under this chapter shall be
634 collected from a purchaser.
635 (b) A seller may not collect as tax an amount, without regard to fractional parts of one
636 cent, in excess of the tax computed at the rates prescribed by this chapter.
637 (c) (i) Each seller shall:
638 (A) give the purchaser a receipt for the tax collected; or
639 (B) bill the tax as a separate item and declare the name of this state and the seller's
640 sales and use tax license number on the invoice for the sale.
641 (ii) The receipt or invoice is prima facie evidence that the seller has collected the tax
642 and relieves the purchaser of the liability for reporting the tax to the commission as a
643 consumer.
644 (d) A seller is not required to maintain a separate account for the tax collected, but is
645 considered to be a person charged with receipt, safekeeping, and transfer of public money.
646 (e) Taxes collected by a seller pursuant to this chapter shall be held in trust for the
647 benefit of the state and for payment to the commission in the manner and at the time provided
648 for in this chapter.
649 (f) If any seller, during any reporting period, collects as a tax an amount in excess of
650 the lawful state and local percentage of total taxable sales allowed under this chapter, the seller
651 shall remit to the commission the full amount of the tax imposed under this chapter, plus any
652 excess.
653 (g) If the accounting methods regularly employed by the seller in the transaction of the
654 seller's business are such that reports of sales made during a calendar month or quarterly period
655 will impose unnecessary hardships, the commission may accept reports at intervals that will, in
656 the commission's opinion, better suit the convenience of the taxpayer or seller and will not
657 jeopardize collection of the tax.
658 (h) (i) For a purchase paid with specie legal tender as defined in Section 59-1-1501.1,
659 and until such time as the commission accepts specie legal tender for the payment of a tax
660 under this chapter, if the commission requires a seller to remit a tax under this chapter in legal
661 tender other than specie legal tender, the seller shall state on the seller's books and records and
662 on an invoice, bill of sale, or similar document provided to the purchaser:
663 (A) the purchase price in specie legal tender and in the legal tender the seller is
664 required to remit to the commission;
665 (B) subject to Subsection (3)(h)(ii), the amount of tax due under this chapter in specie
666 legal tender and in the legal tender the seller is required to remit to the commission;
667 (C) the tax rate under this chapter applicable to the purchase; and
668 (D) the date of the purchase.
669 (ii) (A) Subject to Subsection (3)(h)(ii)(B), for purposes of determining the amount of
670 tax due under Subsection (3)(h)(i), a seller shall use the most recent London fixing price for the
671 specie legal tender the purchaser paid.
672 (B) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
673 commission may make rules for determining the amount of tax due under Subsection (3)(h)(i)
674 if the London fixing price is not available for a particular day.
675 (4) (a) Except as provided in Subsections (5) through (7) and Section 59-12-108, the
676 sales or use tax imposed by this chapter is due and payable to the commission quarterly on or
677 before the last day of the month next succeeding each calendar quarterly period.
678 (b) (i) Each seller shall, on or before the last day of the month next succeeding each
679 calendar quarterly period, file with the commission a return for the preceding quarterly period.
680 (ii) The seller shall remit with the return under Subsection (4)(b)(i) the amount of the
681 tax required under this chapter to be collected or paid for the period covered by the return.
682 (c) Except as provided in Subsection (5)(c), a return shall contain information and be in
683 a form the commission prescribes by rule.
684 (d) (i) Subject to Subsection (4)(d)(ii), the sales tax as computed in the return shall be
685 based on the total nonexempt sales made during the period for which the return is filed,
686 including both cash and charge sales.
687 (ii) For a sale that includes the delivery or installation of tangible personal property at a
688 location other than a seller's place of business described in Subsection (2)(a)(i), if the delivery
689 or installation is separately stated on an invoice or receipt, a seller may compute the tax due on
690 the sale for purposes of Subsection (4)(d)(i) based on the amount the seller receives for that
691 sale during each period for which the seller receives payment for the sale.
692 (e) (i) The use tax as computed in the return shall be based on the total amount of
693 purchases for storage, use, or other consumption in this state made during the period for which
694 the return is filed, including both cash and charge purchases.
695 (ii) (A) As used in this Subsection (4)(e)(ii), "qualifying purchaser" means a purchaser
696 who is required to remit taxes under this chapter, but is not required to remit taxes monthly in
697 accordance with Section 59-12-108, and who converts tangible personal property into real
698 property.
699 (B) Subject to Subsections (4)(e)(ii)(C) and (D), a qualifying purchaser may remit the
700 taxes due under this chapter on tangible personal property for which the qualifying purchaser
701 claims an exemption as allowed under Subsection 59-12-104(23) or (25) based on the period in
702 which the qualifying purchaser receives payment, in accordance with Subsection (4)(e)(ii)(C),
703 for the conversion of the tangible personal property into real property.
704 (C) A qualifying purchaser remitting taxes due under this chapter in accordance with
705 Subsection (4)(e)(ii)(B) shall remit an amount equal to the total amount of tax due on the
706 qualifying purchaser's purchase of the tangible personal property that was converted into real
707 property multiplied by a fraction, the numerator of which is the payment received in the period
708 for the qualifying purchaser's sale of the tangible personal property that was converted into real
709 property and the denominator of which is the entire sales price for the qualifying purchaser's
710 sale of the tangible personal property that was converted into real property.
711 (D) A qualifying purchaser may remit taxes due under this chapter in accordance with
712 this Subsection (4)(e)(ii) only if the books and records that the qualifying purchaser keeps in
713 the qualifying purchaser's regular course of business identify by reasonable and verifiable
714 standards that the tangible personal property was converted into real property.
715 (f) (i) Subject to Subsection (4)(f)(ii) and in accordance with Title 63G, Chapter 3,
716 Utah Administrative Rulemaking Act, the commission may by rule extend the time for making
717 returns and paying the taxes.
718 (ii) An extension under Subsection (4)(f)(i) may not be for more than 90 days.
719 (g) The commission may require returns and payment of the tax to be made for other
720 than quarterly periods if the commission considers it necessary in order to ensure the payment
721 of the tax imposed by this chapter.
722 (h) (i) The commission may require a seller that files a simplified electronic return with
723 the commission to file an additional electronic report with the commission.
724 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
725 commission may make rules providing:
726 (A) the information required to be included in the additional electronic report described
727 in Subsection (4)(h)(i); and
728 (B) one or more due dates for filing the additional electronic report described in
729 Subsection (4)(h)(i).
730 (5) (a) As used in this Subsection (5) and Subsection (6)(b), "remote seller" means a
731 seller that is:
732 (i) registered under the agreement;
733 (ii) described in Subsection (2)[
734 (iii) not a:
735 (A) model 1 seller;
736 (B) model 2 seller; or
737 (C) model 3 seller.
738 (b) (i) Except as provided in Subsection (5)(b)(ii), a tax a remote seller collects in
739 accordance with Subsection (2)[
740 (A) to the commission;
741 (B) annually; and
742 (C) on or before the last day of the month immediately following the last day of each
743 calendar year.
744 (ii) The commission may require that a tax a remote seller collects in accordance with
745 Subsection (2)[
746 (A) to the commission; and
747 (B) on the last day of the month immediately following any month in which the seller
748 accumulates a total of at least $1,000 in agreement sales and use tax.
749 (c) (i) If a remote seller remits a tax to the commission in accordance with Subsection
750 (5)(b), the remote seller shall file a return:
751 (A) with the commission;
752 (B) with respect to the tax;
753 (C) containing information prescribed by the commission; and
754 (D) on a form prescribed by the commission.
755 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
756 commission shall make rules prescribing:
757 (A) the information required to be contained in a return described in Subsection
758 (5)(c)(i); and
759 (B) the form described in Subsection (5)(c)(i)(D).
760 (d) A tax a remote seller collects in accordance with this Subsection (5) shall be
761 calculated on the basis of the total amount of taxable transactions under Subsection
762 59-12-103(1) the remote seller completes, including:
763 (i) a cash transaction; and
764 (ii) a charge transaction.
765 (6) (a) Except as provided in Subsection (6)(b), a tax a seller that files a simplified
766 electronic return collects in accordance with this chapter is due and payable:
767 (i) monthly on or before the last day of the month immediately following the month for
768 which the seller collects a tax under this chapter; and
769 (ii) for the month for which the seller collects a tax under this chapter.
770 (b) A tax a remote seller that files a simplified electronic return collects in accordance
771 with this chapter is due and payable as provided in Subsection (5).
772 (7) (a) On each vehicle sale made by other than a regular licensed vehicle dealer, the
773 purchaser shall pay the sales or use tax directly to the commission if the vehicle is subject to
774 titling or registration under the laws of this state.
775 (b) The commission shall collect the tax described in Subsection (7)(a) when the
776 vehicle is titled or registered.
777 (8) If any sale of tangible personal property or any other taxable transaction under
778 Subsection 59-12-103(1), is made by a wholesaler to a retailer, the wholesaler is not
779 responsible for the collection or payment of the tax imposed on the sale and the retailer is
780 responsible for the collection or payment of the tax imposed on the sale if:
781 (a) the retailer represents that the personal property is purchased by the retailer for
782 resale; and
783 (b) the personal property is not subsequently resold.
784 (9) If any sale of property or service subject to the tax is made to a person prepaying
785 sales or use tax in accordance with Title 63M, Chapter 5, Resource Development Act, or to a
786 contractor or subcontractor of that person, the person to whom such payment or consideration
787 is payable is not responsible for the collection or payment of the sales or use tax and the person
788 prepaying the sales or use tax is responsible for the collection or payment of the sales or use tax
789 if the person prepaying the sales or use tax represents that the amount prepaid as sales or use
790 tax has not been fully credited against sales or use tax due and payable under the rules
791 promulgated by the commission.
792 (10) (a) For purposes of this Subsection (10):
793 (i) Except as provided in Subsection (10)(a)(ii), "bad debt" is as defined in Section
794 166, Internal Revenue Code.
795 (ii) Notwithstanding Subsection (10)(a)(i), "bad debt" does not include:
796 (A) an amount included in the purchase price of tangible personal property, a product
797 transferred electronically, or a service that is:
798 (I) not a transaction described in Subsection 59-12-103(1); or
799 (II) exempt under Section 59-12-104;
800 (B) a financing charge;
801 (C) interest;
802 (D) a tax imposed under this chapter on the purchase price of tangible personal
803 property, a product transferred electronically, or a service;
804 (E) an uncollectible amount on tangible personal property or a product transferred
805 electronically that:
806 (I) is subject to a tax under this chapter; and
807 (II) remains in the possession of a seller until the full purchase price is paid;
808 (F) an expense incurred in attempting to collect any debt; or
809 (G) an amount that a seller does not collect on repossessed property.
810 (b) (i) To the extent an amount remitted in accordance with Subsection (4)(d) later
811 becomes bad debt, a seller may deduct the bad debt from the total amount from which a tax
812 under this chapter is calculated on a return.
813 (ii) A qualifying purchaser, as defined in Subsection (4)(e)(ii)(A), may deduct from the
814 total amount of taxes due under this chapter the amount of tax the qualifying purchaser paid on
815 the qualifying purchaser's purchase of tangible personal property converted into real property to
816 the extent that:
817 (A) tax was remitted in accordance with Subsection (4)(e) on that tangible personal
818 property converted into real property;
819 (B) the qualifying purchaser's sale of that tangible personal property converted into real
820 property later becomes bad debt; and
821 (C) the books and records that the qualifying purchaser keeps in the qualifying
822 purchaser's regular course of business identify by reasonable and verifiable standards that the
823 tangible personal property was converted into real property.
824 (c) A seller may file a refund claim with the commission if:
825 (i) the amount of bad debt for the time period described in Subsection (10)(e) exceeds
826 the amount of the seller's sales that are subject to a tax under this chapter for that same time
827 period; and
828 (ii) as provided in Section 59-1-1410.
829 (d) A bad debt deduction under this section may not include interest.
830 (e) A bad debt may be deducted under this Subsection (10) on a return for the time
831 period during which the bad debt:
832 (i) is written off as uncollectible in the seller's books and records; and
833 (ii) would be eligible for a bad debt deduction:
834 (A) for federal income tax purposes; and
835 (B) if the seller were required to file a federal income tax return.
836 (f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
837 claims a refund under this Subsection (10), the seller shall report and remit a tax under this
838 chapter:
839 (i) on the portion of the bad debt the seller recovers; and
840 (ii) on a return filed for the time period for which the portion of the bad debt is
841 recovered.
842 (g) For purposes of reporting a recovery of a portion of bad debt under Subsection
843 (10)(f), a seller shall apply amounts received on the bad debt in the following order:
844 (i) in a proportional amount:
845 (A) to the purchase price of the tangible personal property, product transferred
846 electronically, or service; and
847 (B) to the tax due under this chapter on the tangible personal property, product
848 transferred electronically, or service; and
849 (ii) to:
850 (A) interest charges;
851 (B) service charges; and
852 (C) other charges.
853 (h) A seller's certified service provider may make a deduction or claim a refund for bad
854 debt on behalf of the seller:
855 (i) in accordance with this Subsection (10); and
856 (ii) if the certified service provider credits or refunds the entire amount of the bad debt
857 deduction or refund to the seller.
858 (i) A seller may allocate bad debt among the states that are members of the agreement
859 if the seller's books and records support that allocation.
860 (11) (a) A seller may not, with intent to evade any tax, fail to timely remit the full
861 amount of tax required by this chapter.
862 (b) A violation of this section is punishable as provided in Section 59-1-401.
863 (c) Each person who fails to pay any tax to the state or any amount of tax required to be
864 paid to the state, except amounts determined to be due by the commission under Chapter 1,
865 Part 14, Assessment, Collections, and Refunds Act, or Section 59-12-111, within the time
866 required by this chapter, or who fails to file any return as required by this chapter, shall pay, in
867 addition to the tax, penalties and interest as provided in Sections 59-1-401 and 59-1-402.
868 (d) For purposes of prosecution under this section, each quarterly tax period in which a
869 seller, with intent to evade any tax, collects a tax and fails to timely remit the full amount of the
870 tax required to be remitted, constitutes a separate offense.
871 Section 4. Section 59-12-108 is amended to read:
872 59-12-108. Monthly payment -- Amount of tax a seller may retain -- Penalty --
873 Certain amounts allocated to local taxing jurisdictions.
874 (1) (a) Notwithstanding Section 59-12-107, a seller that has a tax liability under this
875 chapter of $50,000 or more for the previous calendar year shall:
876 (i) file a return with the commission:
877 (A) monthly on or before the last day of the month immediately following the month
878 for which the seller collects a tax under this chapter; and
879 (B) for the month for which the seller collects a tax under this chapter; and
880 (ii) except as provided in Subsection (1)(b), remit with the return required by
881 Subsection (1)(a)(i) the amount the person is required to remit to the commission for each tax,
882 fee, or charge described in Subsection (1)(c):
883 (A) if that seller's tax liability under this chapter for the previous calendar year is less
884 than $96,000, by any method permitted by the commission; or
885 (B) if that seller's tax liability under this chapter for the previous calendar year is
886 $96,000 or more, by electronic funds transfer.
887 (b) A seller shall remit electronically with the return required by Subsection (1)(a)(i)
888 the amount the seller is required to remit to the commission for each tax, fee, or charge
889 described in Subsection (1)(c) if that seller:
890 (i) is required by Section 59-12-107 to file the return electronically; or
891 (ii) (A) is required to collect and remit a tax under Section 59-12-107; and
892 (B) files a simplified electronic return.
893 (c) Subsections (1)(a) and (b) apply to the following taxes, fees, or charges:
894 (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
895 (ii) a fee under Section 19-6-714;
896 (iii) a fee under Section 19-6-805;
897 (iv) a charge under Section 69-2-5;
898 (v) a charge under Section 69-2-5.5;
899 (vi) a charge under Section 69-2-5.6; or
900 (vii) a tax under this chapter.
901 (d) Notwithstanding Subsection (1)(a)(ii) and in accordance with Title 63G, Chapter 3,
902 Utah Administrative Rulemaking Act, the commission shall make rules providing for a method
903 for making same-day payments other than by electronic funds transfer if making payments by
904 electronic funds transfer fails.
905 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
906 commission shall establish by rule procedures and requirements for determining the amount a
907 seller is required to remit to the commission under this Subsection (1).
908 (2) (a) Except as provided in Subsection (3), a seller subject to Subsection (1) or a
909 seller described in Subsection (4) may retain each month the amount allowed by this
910 Subsection (2).
911 (b) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain
912 each month 1.31% of any amounts the seller is required to remit to the commission:
913 (i) for a transaction described in Subsection 59-12-103(1) that is subject to a state tax
914 and a local tax imposed in accordance with the following, for the month for which the seller is
915 filing a return in accordance with Subsection (1):
916 (A) Subsection 59-12-103(2)(a);
917 (B) Subsection 59-12-103(2)(b); and
918 (C) Subsection 59-12-103(2)(d); and
919 (ii) for an agreement sales and use tax.
920 (c) (i) A seller subject to Subsection (1) or a seller described in Subsection (4) may
921 retain each month the amount calculated under Subsection (2)(c)(ii) for a transaction described
922 in Subsection 59-12-103(1) that is subject to the state tax and the local tax imposed in
923 accordance with Subsection 59-12-103(2)(c).
924 (ii) For purposes of Subsection (2)(c)(i), the amount a seller may retain is an amount
925 equal to the sum of:
926 (A) 1.31% of any amounts the seller is required to remit to the commission for:
927 (I) the state tax and the local tax imposed in accordance with Subsection
928 59-12-103(2)(c);
929 (II) the month for which the seller is filing a return in accordance with Subsection (1);
930 and
931 (III) an agreement sales and use tax; and
932 (B) 1.31% of the difference between:
933 (I) the amounts the seller would have been required to remit to the commission:
934 (Aa) in accordance with Subsection 59-12-103(2)(a) if the transaction had been subject
935 to the state tax and the local tax imposed in accordance with Subsection 59-12-103(2)(a);
936 (Bb) for the month for which the seller is filing a return in accordance with Subsection
937 (1); and
938 (Cc) for an agreement sales and use tax; and
939 (II) the amounts the seller is required to remit to the commission for:
940 (Aa) the state tax and the local tax imposed in accordance with Subsection
941 59-12-103(2)(c);
942 (Bb) the month for which the seller is filing a return in accordance with Subsection (1);
943 and
944 (Cc) an agreement sales and use tax.
945 (d) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain
946 each month 1% of any amounts the seller is required to remit to the commission:
947 (i) for the month for which the seller is filing a return in accordance with Subsection
948 (1); and
949 (ii) under:
950 (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
951 (B) Subsection 59-12-603(1)(a)(i)(A); or
952 (C) Subsection 59-12-603(1)(a)(i)(B).
953 (3) A state government entity that is required to remit taxes monthly in accordance
954 with Subsection (1) may not retain any amount under Subsection (2).
955 (4) A seller that has a tax liability under this chapter for the previous calendar year of
956 less than $50,000 may:
957 (a) voluntarily meet the requirements of Subsection (1); and
958 (b) if the seller voluntarily meets the requirements of Subsection (1), retain the
959 amounts allowed by Subsection (2).
960 (5) (a) Subject to Subsections (5)(b) through (d), a seller that voluntarily collects and
961 remits a tax in accordance with Subsection 59-12-107(2)[
962 to 18% of any amounts the seller would otherwise remit to the commission:
963 (i) if the seller obtains a license under Section 59-12-106 for the first time on or after
964 January 1, 2014; and
965 (ii) for:
966 (A) an agreement sales and use tax; and
967 (B) the time period for which the seller files a return in accordance with this section.
968 (b) If a seller retains an amount under this Subsection (5), the seller may not retain any
969 other amount under this section.
970 (c) If a seller retains an amount under this Subsection (5), the commission may require
971 the seller to file a return by:
972 (i) electronic means; or
973 (ii) a means other than electronic means.
974 (d) A seller may not retain an amount under this Subsection (5) if the seller is required
975 to collect or remit a tax under this section in accordance with Section 59-12-103.1.
976 (6) Penalties for late payment shall be as provided in Section 59-1-401.
977 (7) (a) Except as provided in Subsection (7)(c), for any amounts required to be remitted
978 to the commission under this part, the commission shall each month calculate an amount equal
979 to the difference between:
980 (i) the total amount retained for that month by all sellers had the percentages listed
981 under Subsections (2)(b) and (2)(c)(ii) been 1.5%; and
982 (ii) the total amount retained for that month by all sellers at the percentages listed
983 under Subsections (2)(b) and (2)(c)(ii).
984 (b) The commission shall each month allocate the amount calculated under Subsection
985 (7)(a) to each county, city, and town on the basis of the proportion of agreement sales and use
986 tax that the commission distributes to each county, city, and town for that month compared to
987 the total agreement sales and use tax that the commission distributes for that month to all
988 counties, cities, and towns.
989 (c) The amount the commission calculates under Subsection (7)(a) may not include an
990 amount collected from a tax that:
991 (i) the state imposes within a county, city, or town, including the unincorporated area
992 of a county; and
993 (ii) is not imposed within the entire state.
994 Section 5. Section 59-12-211 is amended to read:
995 59-12-211. Definitions -- Location of certain transactions -- Reports to
996 commission -- Direct payment provision for a seller making certain purchases --
997 Exceptions.
998 (1) As used in this section:
999 (a) (i) "Receipt" and "receive" mean:
1000 (A) taking possession of tangible personal property;
1001 (B) making first use of a service; or
1002 (C) for a product transferred electronically, the earlier of:
1003 (I) taking possession of the product transferred electronically; or
1004 (II) making first use of the product transferred electronically.
1005 (ii) "Receipt" and "receive" do not include possession by a shipping company on behalf
1006 of a purchaser.
1007 (b) "Transportation equipment" means:
1008 (i) a locomotive or rail car that is used to carry a person or property in interstate
1009 commerce;
1010 (ii) a truck or truck-tractor:
1011 (A) with a gross vehicle weight rating of 10,001 pounds or more;
1012 (B) registered under Section 41-1a-301; and
1013 (C) operated under the authority of a carrier authorized and certificated:
1014 (I) by the United States Department of Transportation or another federal authority; and
1015 (II) to engage in carrying a person or property in interstate commerce;
1016 (iii) a trailer, semitrailer, or passenger bus that is:
1017 (A) registered under Section 41-1a-301; and
1018 (B) operated under the authority of a carrier authorized and certificated:
1019 (I) by the United States Department of Transportation or another federal authority; and
1020 (II) to engage in carrying a person or property in interstate commerce;
1021 (iv) an aircraft that is operated by an air carrier authorized and certificated:
1022 (A) by the United States Department of Transportation or another federal or foreign
1023 authority; and
1024 (B) to engage in carrying a person or property in interstate commerce; or
1025 (v) a container designed for use on, or a component part attached or secured on, an
1026 item of equipment listed in Subsections (1)(b)(i) through (iv).
1027 (2) Except as provided in Subsections (8) and (14), if tangible personal property, a
1028 product transferred electronically, or a service that is subject to taxation under this chapter is
1029 received by a purchaser at a business location of a seller, the location of the transaction is the
1030 business location of the seller.
1031 (3) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9), (11),
1032 and (14), if tangible personal property, a product transferred electronically, or a service that is
1033 subject to taxation under this chapter is not received by a purchaser at a business location of a
1034 seller, the location of the transaction is the location where the purchaser takes receipt of the
1035 tangible personal property or service.
1036 (4) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9), (11),
1037 and (14), if Subsection (2) or (3) does not apply, the location of the transaction is the location
1038 indicated by an address for or other information on the purchaser if:
1039 (a) the address or other information is available from the seller's business records; and
1040 (b) use of the address or other information from the seller's records does not constitute
1041 bad faith.
1042 (5) (a) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9),
1043 (11), and (14), if Subsection (2), (3), or (4) does not apply, the location of the transaction is the
1044 location indicated by an address for the purchaser if:
1045 (i) the address is obtained during the consummation of the transaction; and
1046 (ii) use of the address described in Subsection (5)(a)(i) does not constitute bad faith.
1047 (b) An address used under Subsection (5)(a) includes the address of a purchaser's
1048 payment instrument if no other address is available.
1049 (6) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9), (11),
1050 and (14), if Subsection (2), (3), (4), or (5) does not apply or if a seller does not have sufficient
1051 information to apply Subsection (2), (3), (4), or (5), the location of the transaction is the
1052 location:
1053 (a) indicated by the address from which:
1054 (i) except as provided in Subsection (6)(a)(ii), for tangible personal property that is
1055 subject to taxation under this chapter, the tangible personal property is shipped;
1056 (ii) for computer software delivered electronically or for a product transferred
1057 electronically that is subject to taxation under this chapter, the computer software or product
1058 transferred electronically is first available for transmission by the seller; or
1059 (iii) for a service that is subject to taxation under this chapter, the service is provided;
1060 or
1061 (b) as determined by the seller with respect to a prepaid wireless calling service:
1062 (i) provided in Subsection (6)(a)(iii); or
1063 (ii) associated with the mobile telephone number.
1064 (7) (a) For purposes of this Subsection (7), "shared ZIP Code" means a nine-digit ZIP
1065 Code that is located within two or more local taxing jurisdictions.
1066 (b) If the location of a transaction determined under Subsections (3) through (6) is in a
1067 shared ZIP Code, the location of the transaction is:
1068 (i) if there is only one local taxing jurisdiction that imposes the lowest agreement
1069 combined tax rate for the shared ZIP Code, the local taxing jurisdiction that imposes the lowest
1070 agreement combined tax rate; or
1071 (ii) if two or more local taxing jurisdictions impose the lowest agreement combined tax
1072 rate for the shared ZIP Code, the local taxing jurisdiction that:
1073 (A) imposes the lowest agreement combined tax rate for the shared ZIP Code; and
1074 (B) has located within the local taxing jurisdiction the largest number of street
1075 addresses within the shared ZIP Code.
1076 (c) Notwithstanding any provision under this chapter authorizing or requiring the
1077 imposition of a sales and use tax, for purposes of Subsection (7)(b), a seller shall collect a sales
1078 and use tax imposed under this chapter at the lowest agreement combined tax rate imposed
1079 within the local taxing jurisdiction in which the transaction is located under Subsection (7)(b).
1080 (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1081 commission may make rules:
1082 (i) providing for the circumstances under which a seller has exercised due diligence in
1083 determining the nine-digit ZIP Code for an address; or
1084 (ii) notwithstanding Subsection (7)(b), for determining the local taxing jurisdiction
1085 within which a transaction is located if a seller is unable to determine the local taxing
1086 jurisdiction within which the transaction is located under Subsection (7)(b).
1087 (8) The location of a transaction made with a direct payment permit described in
1088 Section 59-12-107.1 is the location where receipt of the tangible personal property, product, or
1089 service by the purchaser occurs.
1090 (9) The location of a purchase of direct mail is the location determined in accordance
1091 with Section 59-12-123.
1092 (10) (a) Except as provided in Subsection (10)(b), the location of a transaction
1093 determined under Subsections (3) through (6), (8), or (9), is the local taxing jurisdiction within
1094 which:
1095 (i) the nine-digit ZIP Code assigned to the location determined under Subsections (3)
1096 through (6), (8), or (9) is located; or
1097 (ii) the five-digit ZIP Code assigned to the location determined under Subsections (3)
1098 through (6), (8), or (9) is located if:
1099 (A) a nine-digit ZIP Code is not available for the location determined under
1100 Subsections (3) through (6), (8), or (9); or
1101 (B) after exercising due diligence, a seller or certified service provider is unable to
1102 determine a nine-digit ZIP Code for the location determined under Subsections (3) through (6),
1103 (8), or (9).
1104 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1105 commission may make rules for determining the local taxing jurisdiction within which a
1106 transaction is located if a seller or certified service provider is unable to determine the local
1107 taxing jurisdiction within which the transaction is located under Subsection (10)(a).
1108 (11) (a) As used in this Subsection (11), "florist delivery transaction" means a
1109 transaction commenced by a florist that transmits an order:
1110 (i) by:
1111 (A) telegraph;
1112 (B) telephone; or
1113 (C) a means of communication similar to Subsection (11)(a)(i)(A) or (B); and
1114 (ii) for delivery to another place:
1115 (A) in this state; or
1116 (B) outside this state.
1117 (b) Notwithstanding Subsections (3) through (6), beginning on January 1, 2009, and
1118 ending on December 31, 2009, the location of a florist delivery transaction is the business
1119 location of the florist that commences the florist delivery transaction.
1120 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1121 commission may by rule:
1122 (i) define:
1123 (A) "business location"; and
1124 (B) "florist";
1125 (ii) define what constitutes a means of communication similar to Subsection
1126 (11)(a)(i)(A) or (B); and
1127 (iii) provide procedures for determining when a transaction is commenced.
1128 (12) (a) Notwithstanding any other provision of this section and except as provided in
1129 Subsection (12)(b), if a purchaser uses computer software and there is not a transfer of a copy
1130 of that software to the purchaser, the location of the transaction is determined in accordance
1131 with Subsections (4) and (5).
1132 (b) If a purchaser uses computer software described in Subsection (12)(a) at more than
1133 one location, the location of the transaction shall be determined in accordance with rules made
1134 by the commission in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
1135 Act.
1136 (13) (a) A tax collected under this chapter shall be reported to the commission on a
1137 form that identifies the location of each transaction that occurs during the return filing period.
1138 (b) The form described in Subsection (13)(a) shall be filed with the commission as
1139 required under this chapter.
1140 (14) This section does not apply to:
1141 (a) amounts charged by a seller for:
1142 (i) telecommunications service except for a prepaid calling service or a prepaid
1143 wireless calling service as provided in Subsection (6)(b) or Section 59-12-215; or
1144 (ii) the retail sale or transfer of:
1145 (A) a motor vehicle other than a motor vehicle that is transportation equipment;
1146 (B) an aircraft other than an aircraft that is transportation equipment;
1147 (C) a watercraft;
1148 (D) a modular home;
1149 (E) a manufactured home; or
1150 (F) a mobile home; or
1151 (iii) except as provided in Section 59-12-214, the lease or rental of tangible personal
1152 property other than tangible personal property that is transportation equipment;
1153 (b) a tax a person pays in accordance with Subsection 59-12-107(2)[
1154 (c) a retail sale of tangible personal property or a product transferred electronically if:
1155 (i) the seller receives the order for the tangible personal property or product transferred
1156 electronically in this state;
1157 (ii) receipt of the tangible personal property or product transferred electronically by the
1158 purchaser or the purchaser's donee occurs in this state;
1159 (iii) the location where receipt of the tangible personal property or product transferred
1160 electronically by the purchaser occurs is determined in accordance with Subsections (3)
1161 through (5); and
1162 (iv) at the time the seller receives the order, the record keeping system that the seller
1163 uses to calculate the proper amount of tax imposed under this chapter captures the location
1164 where the order is received.
1165 Section 6. Section 59-12-211.1 is amended to read:
1166 59-12-211.1. Location of a transaction that is subject to a use tax.
1167 (1) Subject to Subsection (2), a person that is required by Subsection
1168 59-12-107(2)[
1169 transaction at the person's location.
1170 (2) For purposes of Subsection (1), if a person has more than one location in this state,
1171 the person shall report the location of the transaction at the location at which tangible personal
1172 property, a product transferred electronically, or a service is received.
1173 Section 7. Effective date.
1174 This bill takes effect on July 1, 2015.
Legislative Review Note
as of 3-4-15 3:05 PM
Office of Legislative Research and General Counsel