1     
AMENDMENTS TO SALES AND USE TAX EXEMPTIONS

2     
2015 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Curtis S. Bramble

5     
House Sponsor: Brad R. Wilson

6     

7     LONG TITLE
8     General Description:
9          This bill enacts a sales and use tax exemption.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines a term;
13          ▸     enacts a sales and use tax exemption for certain purchases or leases made by a
14     drilling equipment manufacturer;
15          ▸     provides that for a certain time period, the exemption may be claimed only by filing
16     for a partial refund of the tax paid; and
17          ▸     makes technical and conforming changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          This bill provides a special effective date.
22     Utah Code Sections Affected:
23     AMENDS:
24          59-12-102, as last amended by Laws of Utah 2014, Chapters 380 and 414
25          59-12-104, as last amended by Laws of Utah 2014, Chapters 24, 27, 122, 376, and 380
26     

27     Be it enacted by the Legislature of the state of Utah:
28          Section 1. Section 59-12-102 is amended to read:
29          59-12-102. Definitions.

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

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

86          (t) Section 59-12-2216;
87          (u) Section 59-12-2217; or
88          (v) Section 59-12-2218.
89          (7) "Aircraft" is as defined in Section 72-10-102.
90          (8) "Aircraft maintenance, repair, and overhaul provider" means a business entity:
91          (a) except for:
92          (i) an airline as defined in Section 59-2-102; or
93          (ii) an affiliated group, as defined in Section 59-7-101, except that "affiliated group"
94     includes a corporation that is qualified to do business but is not otherwise doing business in the
95     state, of an airline; and
96          (b) that has the workers, expertise, and facilities to perform the following, regardless of
97     whether the business entity performs the following in this state:
98          (i) check, diagnose, overhaul, and repair:
99          (A) an onboard system of a fixed wing turbine powered aircraft; and
100          (B) the parts that comprise an onboard system of a fixed wing turbine powered aircraft;
101          (ii) assemble, change, dismantle, inspect, and test a fixed wing turbine powered aircraft
102     engine;
103          (iii) perform at least the following maintenance on a fixed wing turbine powered
104     aircraft:
105          (A) an inspection;
106          (B) a repair, including a structural repair or modification;
107          (C) changing landing gear; and
108          (D) addressing issues related to an aging fixed wing turbine powered aircraft;
109          (iv) completely remove the existing paint of a fixed wing turbine powered aircraft and
110     completely apply new paint to the fixed wing turbine powered aircraft; and
111          (v) refurbish the interior of a fixed wing turbine powered aircraft in a manner that
112     results in a change in the fixed wing turbine powered aircraft's certification requirements by the
113     authority that certifies the fixed wing turbine powered aircraft.

114          (9) "Alcoholic beverage" means a beverage that:
115          (a) is suitable for human consumption; and
116          (b) contains .5% or more alcohol by volume.
117          (10) "Alternative energy" means:
118          (a) biomass energy;
119          (b) geothermal energy;
120          (c) hydroelectric energy;
121          (d) solar energy;
122          (e) wind energy; or
123          (f) energy that is derived from:
124          (i) coal-to-liquids;
125          (ii) nuclear fuel;
126          (iii) oil-impregnated diatomaceous earth;
127          (iv) oil sands;
128          (v) oil shale;
129          (vi) petroleum coke; or
130          (vii) waste heat from:
131          (A) an industrial facility; or
132          (B) a power station in which an electric generator is driven through a process in which
133     water is heated, turns into steam, and spins a steam turbine.
134          (11) (a) Subject to Subsection (11)(b), "alternative energy electricity production
135     facility" means a facility that:
136          (i) uses alternative energy to produce electricity; and
137          (ii) has a production capacity of two megawatts or greater.
138          (b) A facility is an alternative energy electricity production facility regardless of
139     whether the facility is:
140          (i) connected to an electric grid; or
141          (ii) located on the premises of an electricity consumer.

142          (12) (a) "Ancillary service" means a service associated with, or incidental to, the
143     provision of telecommunications service.
144          (b) "Ancillary service" includes:
145          (i) a conference bridging service;
146          (ii) a detailed communications billing service;
147          (iii) directory assistance;
148          (iv) a vertical service; or
149          (v) a voice mail service.
150          (13) "Area agency on aging" is as defined in Section 62A-3-101.
151          (14) "Assisted amusement device" means an amusement device, skill device, or ride
152     device that is started and stopped by an individual:
153          (a) who is not the purchaser or renter of the right to use or operate the amusement
154     device, skill device, or ride device; and
155          (b) at the direction of the seller of the right to use the amusement device, skill device,
156     or ride device.
157          (15) "Assisted cleaning or washing of tangible personal property" means cleaning or
158     washing of tangible personal property if the cleaning or washing labor is primarily performed
159     by an individual:
160          (a) who is not the purchaser of the cleaning or washing of the tangible personal
161     property; and
162          (b) at the direction of the seller of the cleaning or washing of the tangible personal
163     property.
164          (16) "Authorized carrier" means:
165          (a) in the case of vehicles operated over public highways, the holder of credentials
166     indicating that the vehicle is or will be operated pursuant to both the International Registration
167     Plan and the International Fuel Tax Agreement;
168          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
169     certificate or air carrier's operating certificate; or

170          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
171     stock, a person who uses locomotives, freight cars, railroad work equipment, or other rolling
172     stock in 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) waste vegetable oil;
180          (D) methane or synthetic gas produced at a landfill, as a byproduct of the treatment of
181     wastewater residuals, or through the conversion of a waste material through a nonincineration,
182     thermal conversion process;
183          (E) aquatic plants; and
184          (F) agricultural products.
185          (b) "Biomass energy" does not include:
186          (i) black liquor; or
187          (ii) treated woods.
188          (18) (a) "Bundled transaction" means the sale of two or more items of tangible personal
189     property, products, or services if the tangible personal property, products, or services are:
190          (i) distinct and identifiable; and
191          (ii) sold for one nonitemized price.
192          (b) "Bundled transaction" does not include:
193          (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
194     the basis of the selection by the purchaser of the items of tangible personal property included in
195     the transaction;
196          (ii) the sale of real property;
197          (iii) the sale of services to real property;

198          (iv) the retail sale of tangible personal property and a service if:
199          (A) the tangible personal property:
200          (I) is essential to the use of the service; and
201          (II) is provided exclusively in connection with the service; and
202          (B) the service is the true object of the transaction;
203          (v) the retail sale of two services if:
204          (A) one service is provided that is essential to the use or receipt of a second service;
205          (B) the first service is provided exclusively in connection with the second service; and
206          (C) the second service is the true object of the transaction;
207          (vi) a transaction that includes tangible personal property or a product subject to
208     taxation under this chapter and tangible personal property or a product that is not subject to
209     taxation under this chapter if the:
210          (A) seller's purchase price of the tangible personal property or product subject to
211     taxation under this chapter is de minimis; or
212          (B) seller's sales price of the tangible personal property or product subject to taxation
213     under this chapter is de minimis; and
214          (vii) the retail sale of tangible personal property that is not subject to taxation under
215     this chapter and tangible personal property that is subject to taxation under this chapter if:
216          (A) that retail sale includes:
217          (I) food and food ingredients;
218          (II) a drug;
219          (III) durable medical equipment;
220          (IV) mobility enhancing equipment;
221          (V) an over-the-counter drug;
222          (VI) a prosthetic device; or
223          (VII) a medical supply; and
224          (B) subject to Subsection (18)(f):
225          (I) the seller's purchase price of the tangible personal property subject to taxation under

226     this chapter is 50% or less of the seller's total purchase price of that retail sale; or
227          (II) the seller's sales price of the tangible personal property subject to taxation under
228     this chapter is 50% or less of the seller's total sales price of that retail sale.
229          (c) (i) For purposes of Subsection (18)(a)(i), tangible personal property, a product, or a
230     service that is distinct and identifiable does not include:
231          (A) packaging that:
232          (I) accompanies the sale of the tangible personal property, product, or service; and
233          (II) is incidental or immaterial to the sale of the tangible personal property, product, or
234     service;
235          (B) tangible personal property, a product, or a service provided free of charge with the
236     purchase of another item of tangible personal property, a product, or a service; or
237          (C) an item of tangible personal property, a product, or a service included in the
238     definition of "purchase price."
239          (ii) For purposes of Subsection (18)(c)(i)(B), an item of tangible personal property, a
240     product, or a service is provided free of charge with the purchase of another item of tangible
241     personal property, a product, or a service if the sales price of the purchased item of tangible
242     personal property, product, or service does not vary depending on the inclusion of the tangible
243     personal property, product, or service provided free of charge.
244          (d) (i) For purposes of Subsection (18)(a)(ii), property sold for one nonitemized price
245     does not include a price that is separately identified by tangible personal property, product, or
246     service on the following, regardless of whether the following is in paper format or electronic
247     format:
248          (A) a binding sales document; or
249          (B) another supporting sales-related document that is available to a purchaser.
250          (ii) For purposes of Subsection (18)(d)(i), a binding sales document or another
251     supporting sales-related document that is available to a purchaser includes:
252          (A) a bill of sale;
253          (B) a contract;

254          (C) an invoice;
255          (D) a lease agreement;
256          (E) a periodic notice of rates and services;
257          (F) a price list;
258          (G) a rate card;
259          (H) a receipt; or
260          (I) a service agreement.
261          (e) (i) For purposes of Subsection (18)(b)(vi), the sales price of tangible personal
262     property or a product subject to taxation under this chapter is de minimis if:
263          (A) the seller's purchase price of the tangible personal property or product is 10% or
264     less of the seller's total purchase price of the bundled transaction; or
265          (B) the seller's sales price of the tangible personal property or product is 10% or less of
266     the seller's total sales price of the bundled transaction.
267          (ii) For purposes of Subsection (18)(b)(vi), a seller:
268          (A) shall use the seller's purchase price or the seller's sales price to determine if the
269     purchase price or sales price of the tangible personal property or product subject to taxation
270     under this chapter is de minimis; and
271          (B) may not use a combination of the seller's purchase price and the seller's sales price
272     to determine if the purchase price or sales price of the tangible personal property or product
273     subject to taxation under this chapter is de minimis.
274          (iii) For purposes of Subsection (18)(b)(vi), a seller shall use the full term of a service
275     contract to determine if the sales price of tangible personal property or a product is de minimis.
276          (f) For purposes of Subsection (18)(b)(vii)(B), a seller may not use a combination of
277     the seller's purchase price and the seller's sales price to determine if tangible personal property
278     subject to taxation under this chapter is 50% or less of the seller's total purchase price or sales
279     price of that retail sale.
280          (19) "Certified automated system" means software certified by the governing board of
281     the agreement that:

282          (a) calculates the agreement sales and use tax imposed within a local taxing
283     jurisdiction:
284          (i) on a transaction; and
285          (ii) in the states that are members of the agreement;
286          (b) determines the amount of agreement sales and use tax to remit to a state that is a
287     member of the agreement; and
288          (c) maintains a record of the transaction described in Subsection (19)(a)(i).
289          (20) "Certified service provider" means an agent certified:
290          (a) by the governing board of the agreement; and
291          (b) to perform all of a seller's sales and use tax functions for an agreement sales and
292     use tax other than the seller's obligation under Section 59-12-124 to remit a tax on the seller's
293     own purchases.
294          (21) (a) Subject to Subsection (21)(b), "clothing" means all human wearing apparel
295     suitable for general use.
296          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
297     commission shall make rules:
298          (i) listing the items that constitute "clothing"; and
299          (ii) that are consistent with the list of items that constitute "clothing" under the
300     agreement.
301          (22) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
302          (23) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
303     fuels that does not constitute industrial use under Subsection [(55)] (56) or residential use
304     under Subsection [(105)] (106).
305          (24) (a) "Common carrier" means a person engaged in or transacting the business of
306     transporting passengers, freight, merchandise, or other property for hire within this state.
307          (b) (i) "Common carrier" does not include a person who, at the time the person is
308     traveling to or from that person's place of employment, transports a passenger to or from the
309     passenger's place of employment.

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

338          (30) "Construction materials" means any tangible personal property that will be
339     converted into real property.
340          (31) "Delivered electronically" means delivered to a purchaser by means other than
341     tangible storage media.
342          (32) (a) "Delivery charge" means a charge:
343          (i) by a seller of:
344          (A) tangible personal property;
345          (B) a product transferred electronically; or
346          (C) services; and
347          (ii) for preparation and delivery of the tangible personal property, product transferred
348     electronically, or services described in Subsection (32)(a)(i) to a location designated by the
349     purchaser.
350          (b) "Delivery charge" includes a charge for the following:
351          (i) transportation;
352          (ii) shipping;
353          (iii) postage;
354          (iv) handling;
355          (v) crating; or
356          (vi) packing.
357          (33) "Detailed telecommunications billing service" means an ancillary service of
358     separately stating information pertaining to individual calls on a customer's billing statement.
359          (34) "Dietary supplement" means a product, other than tobacco, that:
360          (a) is intended to supplement the diet;
361          (b) contains one or more of the following dietary ingredients:
362          (i) a vitamin;
363          (ii) a mineral;
364          (iii) an herb or other botanical;
365          (iv) an amino acid;

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

394          (38) (a) "Direct mail" means printed material delivered or distributed by United States
395     mail or other delivery service:
396          (i) to:
397          (A) a mass audience; or
398          (B) addressees on a mailing list provided:
399          (I) by a purchaser of the mailing list; or
400          (II) at the discretion of the purchaser of the mailing list; and
401          (ii) if the cost of the printed material is not billed directly to the recipients.
402          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
403     purchaser to a seller of direct mail for inclusion in a package containing the printed material.
404          (c) "Direct mail" does not include multiple items of printed material delivered to a
405     single address.
406          (39) "Directory assistance" means an ancillary service of providing:
407          (a) address information; or
408          (b) telephone number information.
409          (40) (a) "Disposable home medical equipment or supplies" means medical equipment
410     or supplies that:
411          (i) cannot withstand repeated use; and
412          (ii) are purchased by, for, or on behalf of a person other than:
413          (A) a health care facility as defined in Section 26-21-2;
414          (B) a health care provider as defined in Section 78B-3-403;
415          (C) an office of a health care provider described in Subsection (40)(a)(ii)(B); or
416          (D) a person similar to a person described in Subsections (40)(a)(ii)(A) through (C).
417          (b) "Disposable home medical equipment or supplies" does not include:
418          (i) a drug;
419          (ii) durable medical equipment;
420          (iii) a hearing aid;
421          (iv) a hearing aid accessory;

422          (v) mobility enhancing equipment; or
423          (vi) tangible personal property used to correct impaired vision, including:
424          (A) eyeglasses; or
425          (B) contact lenses.
426          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
427     commission may by rule define what constitutes medical equipment or supplies.
428          (41) "Drilling equipment manufacturer" means a facility:
429          (a) located in the state;
430          (b) with respect to which 51% or more of the manufacturing activities of the facility
431     consist of manufacturing component parts of drilling equipment;
432          (c) that uses pressure of 800,000 or more pounds per square inch as part of the
433     manufacturing process; and
434          (d) that uses a temperature of 2,000 or more degrees Fahrenheit as part of the
435     manufacturing process.
436          [(41)] (42) (a) "Drug" means a compound, substance, or preparation, or a component of
437     a compound, substance, or preparation that is:
438          (i) recognized in:
439          (A) the official United States Pharmacopoeia;
440          (B) the official Homeopathic Pharmacopoeia of the United States;
441          (C) the official National Formulary; or
442          (D) a supplement to a publication listed in Subsections [(41)] (42)(a)(i)(A) through
443     (C);
444          (ii) intended for use in the:
445          (A) diagnosis of disease;
446          (B) cure of disease;
447          (C) mitigation of disease;
448          (D) treatment of disease; or
449          (E) prevention of disease; or

450          (iii) intended to affect:
451          (A) the structure of the body; or
452          (B) any function of the body.
453          (b) "Drug" does not include:
454          (i) food and food ingredients;
455          (ii) a dietary supplement;
456          (iii) an alcoholic beverage; or
457          (iv) a prosthetic device.
458          [(42)] (43) (a) Except as provided in Subsection [(42)] (43)(c), "durable medical
459     equipment" means equipment that:
460          (i) can withstand repeated use;
461          (ii) is primarily and customarily used to serve a medical purpose;
462          (iii) generally is not useful to a person in the absence of illness or injury; and
463          (iv) is not worn in or on the body.
464          (b) "Durable medical equipment" includes parts used in the repair or replacement of the
465     equipment described in Subsection [(42)] (43)(a).
466          (c) "Durable medical equipment" does not include mobility enhancing equipment.
467          [(43)] (44) "Electronic" means:
468          (a) relating to technology; and
469          (b) having:
470          (i) electrical capabilities;
471          (ii) digital capabilities;
472          (iii) magnetic capabilities;
473          (iv) wireless capabilities;
474          (v) optical capabilities;
475          (vi) electromagnetic capabilities; or
476          (vii) capabilities similar to Subsections [(43)] (44)(b)(i) through (vi).
477          [(44)] (45) "Electronic financial payment service" means an establishment:

478          (a) within NAICS Code 522320, Financial Transactions Processing, Reserve, and
479     Clearinghouse Activities, of the 2012 North American Industry Classification System of the
480     federal Executive Office of the President, Office of Management and Budget; and
481          (b) that performs electronic financial payment services.
482          [(45)] (46) "Employee" is as defined in Section 59-10-401.
483          [(46)] (47) "Fixed guideway" means a public transit facility that uses and occupies:
484          (a) rail for the use of public transit; or
485          (b) a separate right-of-way for the use of public transit.
486          [(47)] (48) "Fixed wing turbine powered aircraft" means an aircraft that:
487          (a) is powered by turbine engines;
488          (b) operates on jet fuel; and
489          (c) has wings that are permanently attached to the fuselage of the aircraft.
490          [(48)] (49) "Fixed wireless service" means a telecommunications service that provides
491     radio communication between fixed points.
492          [(49)] (50) (a) "Food and food ingredients" means substances:
493          (i) regardless of whether the substances are in:
494          (A) liquid form;
495          (B) concentrated form;
496          (C) solid form;
497          (D) frozen form;
498          (E) dried form; or
499          (F) dehydrated form; and
500          (ii) that are:
501          (A) sold for:
502          (I) ingestion by humans; or
503          (II) chewing by humans; and
504          (B) consumed for the substance's:
505          (I) taste; or

506          (II) nutritional value.
507          (b) "Food and food ingredients" includes an item described in Subsection [(90)]
508     (91)(b)(iii).
509          (c) "Food and food ingredients" does not include:
510          (i) an alcoholic beverage;
511          (ii) tobacco; or
512          (iii) prepared food.
513          [(50)] (51) (a) "Fundraising sales" means sales:
514          (i) (A) made by a school; or
515          (B) made by a school student;
516          (ii) that are for the purpose of raising funds for the school to purchase equipment,
517     materials, or provide transportation; and
518          (iii) that are part of an officially sanctioned school activity.
519          (b) For purposes of Subsection [(50)] (51)(a)(iii), "officially sanctioned school activity"
520     means a school activity:
521          (i) that is conducted in accordance with a formal policy adopted by the school or school
522     district governing the authorization and supervision of fundraising activities;
523          (ii) that does not directly or indirectly compensate an individual teacher or other
524     educational personnel by direct payment, commissions, or payment in kind; and
525          (iii) the net or gross revenues from which are deposited in a dedicated account
526     controlled by the school or school district.
527          [(51)] (52) "Geothermal energy" means energy contained in heat that continuously
528     flows outward from the earth that is used as the sole source of energy to produce electricity.
529          [(52)] (53) "Governing board of the agreement" means the governing board of the
530     agreement that is:
531          (a) authorized to administer the agreement; and
532          (b) established in accordance with the agreement.
533          [(53)] (54) (a) For purposes of Subsection 59-12-104(41), "governmental entity"

534     means:
535          (i) the executive branch of the state, including all departments, institutions, boards,
536     divisions, bureaus, offices, commissions, and committees;
537          (ii) the judicial branch of the state, including the courts, the Judicial Council, the
538     Office of the Court Administrator, and similar administrative units in the judicial branch;
539          (iii) the legislative branch of the state, including the House of Representatives, the
540     Senate, the Legislative Printing Office, the Office of Legislative Research and General
541     Counsel, the Office of the Legislative Auditor General, and the Office of the Legislative Fiscal
542     Analyst;
543          (iv) the National Guard;
544          (v) an independent entity as defined in Section 63E-1-102; or
545          (vi) a political subdivision as defined in Section 17B-1-102.
546          (b) "Governmental entity" does not include the state systems of public and higher
547     education, including:
548          (i) a college campus of the Utah College of Applied Technology;
549          (ii) a school;
550          (iii) the State Board of Education;
551          (iv) the State Board of Regents; or
552          (v) an institution of higher education.
553          [(54)] (55) "Hydroelectric energy" means water used as the sole source of energy to
554     produce electricity.
555          [(55)] (56) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil,
556     or other fuels:
557          (a) in mining or extraction of minerals;
558          (b) in agricultural operations to produce an agricultural product up to the time of
559     harvest or placing the agricultural product into a storage facility, including:
560          (i) commercial greenhouses;
561          (ii) irrigation pumps;

562          (iii) farm machinery;
563          (iv) implements of husbandry as defined in Section 41-1a-102 that are not registered
564     under Title 41, Chapter 1a, Part 2, Registration; and
565          (v) other farming activities;
566          (c) in manufacturing tangible personal property at an establishment described in SIC
567     Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
568     Executive Office of the President, Office of Management and Budget;
569          (d) by a scrap recycler if:
570          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
571     one or more of the following items into prepared grades of processed materials for use in new
572     products:
573          (A) iron;
574          (B) steel;
575          (C) nonferrous metal;
576          (D) paper;
577          (E) glass;
578          (F) plastic;
579          (G) textile; or
580          (H) rubber; and
581          (ii) the new products under Subsection [(55)] (56)(d)(i) would otherwise be made with
582     nonrecycled materials; or
583          (e) in producing a form of energy or steam described in Subsection 54-2-1(2)(a) by a
584     cogeneration facility as defined in Section 54-2-1.
585          [(56)] (57) (a) Except as provided in Subsection [(56)] (57)(b), "installation charge"
586     means a charge for installing:
587          (i) tangible personal property; or
588          (ii) a product transferred electronically.
589          (b) "Installation charge" does not include a charge for:

590          (i) repairs or renovations of:
591          (A) tangible personal property; or
592          (B) a product transferred electronically; or
593          (ii) attaching tangible personal property or a product transferred electronically:
594          (A) to other tangible personal property; and
595          (B) as part of a manufacturing or fabrication process.
596          [(57)] (58) "Institution of higher education" means an institution of higher education
597     listed in Section 53B-2-101.
598          [(58)] (59) (a) "Lease" or "rental" means a transfer of possession or control of tangible
599     personal property or a product transferred electronically for:
600          (i) (A) a fixed term; or
601          (B) an indeterminate term; and
602          (ii) consideration.
603          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
604     amount of consideration may be increased or decreased by reference to the amount realized
605     upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
606     Code.
607          (c) "Lease" or "rental" does not include:
608          (i) a transfer of possession or control of property under a security agreement or
609     deferred payment plan that requires the transfer of title upon completion of the required
610     payments;
611          (ii) a transfer of possession or control of property under an agreement that requires the
612     transfer of title:
613          (A) upon completion of required payments; and
614          (B) if the payment of an option price does not exceed the greater of:
615          (I) $100; or
616          (II) 1% of the total required payments; or
617          (iii) providing tangible personal property along with an operator for a fixed period of

618     time or an indeterminate period of time if the operator is necessary for equipment to perform as
619     designed.
620          (d) For purposes of Subsection [(58)] (59)(c)(iii), an operator is necessary for
621     equipment to perform as designed if the operator's duties exceed the:
622          (i) set-up of tangible personal property;
623          (ii) maintenance of tangible personal property; or
624          (iii) inspection of tangible personal property.
625          [(59)] (60) "Life science establishment" means an establishment in this state that is
626     classified under the following NAICS codes of the 2007 North American Industry
627     Classification System of the federal Executive Office of the President, Office of Management
628     and Budget:
629          (a) NAICS Code 33911, Medical Equipment and Supplies Manufacturing;
630          (b) NAICS Code 334510, Electromedical and Electrotherapeutic Apparatus
631     Manufacturing; or
632          (c) NAICS Code 334517, Irradiation Apparatus Manufacturing.
633          [(60)] (61) "Life science research and development facility" means a facility owned,
634     leased, or rented by a life science establishment if research and development is performed in
635     51% or more of the total area of the facility.
636          [(61)] (62) "Load and leave" means delivery to a purchaser by use of a tangible storage
637     media if the tangible storage media is not physically transferred to the purchaser.
638          [(62)] (63) "Local taxing jurisdiction" means a:
639          (a) county that is authorized to impose an agreement sales and use tax;
640          (b) city that is authorized to impose an agreement sales and use tax; or
641          (c) town that is authorized to impose an agreement sales and use tax.
642          [(63)] (64) "Manufactured home" is as defined in Section 15A-1-302.
643          [(64)] (65) "Manufacturing facility" means:
644          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
645     Industrial Classification Manual of the federal Executive Office of the President, Office of

646     Management and Budget;
647          (b) a scrap recycler if:
648          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
649     one or more of the following items into prepared grades of processed materials for use in new
650     products:
651          (A) iron;
652          (B) steel;
653          (C) nonferrous metal;
654          (D) paper;
655          (E) glass;
656          (F) plastic;
657          (G) textile; or
658          (H) rubber; and
659          (ii) the new products under Subsection [(64)] (65)(b)(i) would otherwise be made with
660     nonrecycled materials; or
661          (c) a cogeneration facility as defined in Section 54-2-1 if the cogeneration facility is
662     placed in service on or after May 1, 2006.
663          [(65)] (66) "Member of the immediate family of the producer" means a person who is
664     related to a producer described in Subsection 59-12-104(20)(a) as a:
665          (a) child or stepchild, regardless of whether the child or stepchild is:
666          (i) an adopted child or adopted stepchild; or
667          (ii) a foster child or foster stepchild;
668          (b) grandchild or stepgrandchild;
669          (c) grandparent or stepgrandparent;
670          (d) nephew or stepnephew;
671          (e) niece or stepniece;
672          (f) parent or stepparent;
673          (g) sibling or stepsibling;

674          (h) spouse;
675          (i) person who is the spouse of a person described in Subsections [(65)] (66)(a) through
676     (g); or
677          (j) person similar to a person described in Subsections [(65)] (66)(a) through (i) as
678     determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
679     Administrative Rulemaking Act.
680          [(66)] (67) "Mobile home" is as defined in Section 15A-1-302.
681          [(67)] (68) "Mobile telecommunications service" is as defined in the Mobile
682     Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
683          [(68)] (69) (a) "Mobile wireless service" means a telecommunications service,
684     regardless of the technology used, if:
685          (i) the origination point of the conveyance, routing, or transmission is not fixed;
686          (ii) the termination point of the conveyance, routing, or transmission is not fixed; or
687          (iii) the origination point described in Subsection [(68)] (69)(a)(i) and the termination
688     point described in Subsection [(68)] (69)(a)(ii) are not fixed.
689          (b) "Mobile wireless service" includes a telecommunications service that is provided
690     by a commercial mobile radio service provider.
691          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
692     commission may by rule define "commercial mobile radio service provider."
693          [(69)] (70) (a) Except as provided in Subsection [(69)] (70)(c), "mobility enhancing
694     equipment" means equipment that is:
695          (i) primarily and customarily used to provide or increase the ability to move from one
696     place to another;
697          (ii) appropriate for use in a:
698          (A) home; or
699          (B) motor vehicle; and
700          (iii) not generally used by persons with normal mobility.
701          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of

702     the equipment described in Subsection [(69)] (70)(a).
703          (c) "Mobility enhancing equipment" does not include:
704          (i) a motor vehicle;
705          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
706     vehicle manufacturer;
707          (iii) durable medical equipment; or
708          (iv) a prosthetic device.
709          [(70)] (71) "Model 1 seller" means a seller registered under the agreement that has
710     selected a certified service provider as the seller's agent to perform all of the seller's sales and
711     use tax functions for agreement sales and use taxes other than the seller's obligation under
712     Section 59-12-124 to remit a tax on the seller's own purchases.
713          [(71)] (72) "Model 2 seller" means a seller registered under the agreement that:
714          (a) except as provided in Subsection [(71)] (72)(b), has selected a certified automated
715     system to perform the seller's sales tax functions for agreement sales and use taxes; and
716          (b) retains responsibility for remitting all of the sales tax:
717          (i) collected by the seller; and
718          (ii) to the appropriate local taxing jurisdiction.
719          [(72)] (73) (a) Subject to Subsection [(72)] (73)(b), "model 3 seller" means a seller
720     registered under the agreement that has:
721          (i) sales in at least five states that are members of the agreement;
722          (ii) total annual sales revenues of at least $500,000,000;
723          (iii) a proprietary system that calculates the amount of tax:
724          (A) for an agreement sales and use tax; and
725          (B) due to each local taxing jurisdiction; and
726          (iv) entered into a performance agreement with the governing board of the agreement.
727          (b) For purposes of Subsection [(72)] (73)(a), "model 3 seller" includes an affiliated
728     group of sellers using the same proprietary system.
729          [(73)] (74) "Model 4 seller" means a seller that is registered under the agreement and is

730     not a model 1 seller, model 2 seller, or model 3 seller.
731          [(74)] (75) "Modular home" means a modular unit as defined in Section 15A-1-302.
732          [(75)] (76) "Motor vehicle" is as defined in Section 41-1a-102.
733          [(76)] (77) "Oil sands" means impregnated bituminous sands that:
734          (a) contain a heavy, thick form of petroleum that is released when heated, mixed with
735     other hydrocarbons, or otherwise treated;
736          (b) yield mixtures of liquid hydrocarbon; and
737          (c) require further processing other than mechanical blending before becoming finished
738     petroleum products.
739          [(77)] (78) "Oil shale" means a group of fine black to dark brown shales containing
740     kerogen material that yields petroleum upon heating and distillation.
741          [(78)] (79) "Optional computer software maintenance contract" means a computer
742     software maintenance contract that a customer is not obligated to purchase as a condition to the
743     retail sale of computer software.
744          [(79)] (80) (a) "Other fuels" means products that burn independently to produce heat or
745     energy.
746          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
747     personal property.
748          [(80)] (81) (a) "Paging service" means a telecommunications service that provides
749     transmission of a coded radio signal for the purpose of activating a specific pager.
750          (b) For purposes of Subsection [(80)] (81)(a), the transmission of a coded radio signal
751     includes a transmission by message or sound.
752          [(81)] (82) "Pawnbroker" is as defined in Section 13-32a-102.
753          [(82)] (83) "Pawn transaction" is as defined in Section 13-32a-102.
754          [(83)] (84) (a) "Permanently attached to real property" means that for tangible personal
755     property attached to real property:
756          (i) the attachment of the tangible personal property to the real property:
757          (A) is essential to the use of the tangible personal property; and

758          (B) suggests that the tangible personal property will remain attached to the real
759     property in the same place over the useful life of the tangible personal property; or
760          (ii) if the tangible personal property is detached from the real property, the detachment
761     would:
762          (A) cause substantial damage to the tangible personal property; or
763          (B) require substantial alteration or repair of the real property to which the tangible
764     personal property is attached.
765          (b) "Permanently attached to real property" includes:
766          (i) the attachment of an accessory to the tangible personal property if the accessory is:
767          (A) essential to the operation of the tangible personal property; and
768          (B) attached only to facilitate the operation of the tangible personal property;
769          (ii) a temporary detachment of tangible personal property from real property for a
770     repair or renovation if the repair or renovation is performed where the tangible personal
771     property and real property are located; or
772          (iii) property attached to oil, gas, or water pipelines, except for the property listed in
773     Subsection [(83)] (84)(c)(iii) or (iv).
774          (c) "Permanently attached to real property" does not include:
775          (i) the attachment of portable or movable tangible personal property to real property if
776     that portable or movable tangible personal property is attached to real property only for:
777          (A) convenience;
778          (B) stability; or
779          (C) for an obvious temporary purpose;
780          (ii) the detachment of tangible personal property from real property except for the
781     detachment described in Subsection [(83)] (84)(b)(ii);
782          (iii) an attachment of the following tangible personal property to real property if the
783     attachment to real property is only through a line that supplies water, electricity, gas,
784     telecommunications, cable, or supplies a similar item as determined by the commission by rule
785     made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:

786          (A) a computer;
787          (B) a telephone;
788          (C) a television; or
789          (D) tangible personal property similar to Subsections [(83)] (84)(c)(iii)(A) through (C)
790     as determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
791     Administrative Rulemaking Act; or
792          (iv) an item listed in Subsection [(123)] (124)(c).
793          [(84)] (85) "Person" includes any individual, firm, partnership, joint venture,
794     association, corporation, estate, trust, business trust, receiver, syndicate, this state, any county,
795     city, municipality, district, or other local governmental entity of the state, or any group or
796     combination acting as a unit.
797          [(85)] (86) "Place of primary use":
798          (a) for telecommunications service other than mobile telecommunications service,
799     means the street address representative of where the customer's use of the telecommunications
800     service primarily occurs, which shall be:
801          (i) the residential street address of the customer; or
802          (ii) the primary business street address of the customer; or
803          (b) for mobile telecommunications service, is as defined in the Mobile
804     Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
805          [(86)] (87) (a) "Postpaid calling service" means a telecommunications service a person
806     obtains by making a payment on a call-by-call basis:
807          (i) through the use of a:
808          (A) bank card;
809          (B) credit card;
810          (C) debit card; or
811          (D) travel card; or
812          (ii) by a charge made to a telephone number that is not associated with the origination
813     or termination of the telecommunications service.

814          (b) "Postpaid calling service" includes a service, except for a prepaid wireless calling
815     service, that would be a prepaid wireless calling service if the service were exclusively a
816     telecommunications service.
817          [(87)] (88) "Postproduction" means an activity related to the finishing or duplication of
818     a medium described in Subsection 59-12-104(54)(a).
819          [(88)] (89) "Prepaid calling service" means a telecommunications service:
820          (a) that allows a purchaser access to telecommunications service that is exclusively
821     telecommunications service;
822          (b) that:
823          (i) is paid for in advance; and
824          (ii) enables the origination of a call using an:
825          (A) access number; or
826          (B) authorization code;
827          (c) that is dialed:
828          (i) manually; or
829          (ii) electronically; and
830          (d) sold in predetermined units or dollars that decline:
831          (i) by a known amount; and
832          (ii) with use.
833          [(89)] (90) "Prepaid wireless calling service" means a telecommunications service:
834          (a) that provides the right to utilize:
835          (i) mobile wireless service; and
836          (ii) other service that is not a telecommunications service, including:
837          (A) the download of a product transferred electronically;
838          (B) a content service; or
839          (C) an ancillary service;
840          (b) that:
841          (i) is paid for in advance; and

842          (ii) enables the origination of a call using an:
843          (A) access number; or
844          (B) authorization code;
845          (c) that is dialed:
846          (i) manually; or
847          (ii) electronically; and
848          (d) sold in predetermined units or dollars that decline:
849          (i) by a known amount; and
850          (ii) with use.
851          [(90)] (91) (a) "Prepared food" means:
852          (i) food:
853          (A) sold in a heated state; or
854          (B) heated by a seller;
855          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
856     item; or
857          (iii) except as provided in Subsection [(90)] (91)(c), food sold with an eating utensil
858     provided by the seller, including a:
859          (A) plate;
860          (B) knife;
861          (C) fork;
862          (D) spoon;
863          (E) glass;
864          (F) cup;
865          (G) napkin; or
866          (H) straw.
867          (b) "Prepared food" does not include:
868          (i) food that a seller only:
869          (A) cuts;

870          (B) repackages; or
871          (C) pasteurizes; or
872          (ii) (A) the following:
873          (I) raw egg;
874          (II) raw fish;
875          (III) raw meat;
876          (IV) raw poultry; or
877          (V) a food containing an item described in Subsections [(90)] (91)(b)(ii)(A)(I) through
878     (IV); and
879          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
880     Food and Drug Administration's Food Code that a consumer cook the items described in
881     Subsection [(90)] (91)(b)(ii)(A) to prevent food borne illness; or
882          (iii) the following if sold without eating utensils provided by the seller:
883          (A) food and food ingredients sold by a seller if the seller's proper primary
884     classification under the 2002 North American Industry Classification System of the federal
885     Executive Office of the President, Office of Management and Budget, is manufacturing in
886     Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
887     Manufacturing;
888          (B) food and food ingredients sold in an unheated state:
889          (I) by weight or volume; and
890          (II) as a single item; or
891          (C) a bakery item, including:
892          (I) a bagel;
893          (II) a bar;
894          (III) a biscuit;
895          (IV) bread;
896          (V) a bun;
897          (VI) a cake;

898          (VII) a cookie;
899          (VIII) a croissant;
900          (IX) a danish;
901          (X) a donut;
902          (XI) a muffin;
903          (XII) a pastry;
904          (XIII) a pie;
905          (XIV) a roll;
906          (XV) a tart;
907          (XVI) a torte; or
908          (XVII) a tortilla.
909          (c) An eating utensil provided by the seller does not include the following used to
910     transport the food:
911          (i) a container; or
912          (ii) packaging.
913          [(91)] (92) "Prescription" means an order, formula, or recipe that is issued:
914          (a) (i) orally;
915          (ii) in writing;
916          (iii) electronically; or
917          (iv) by any other manner of transmission; and
918          (b) by a licensed practitioner authorized by the laws of a state.
919          [(92)] (93) (a) Except as provided in Subsection [(92)] (93)(b)(ii) or (iii), "prewritten
920     computer software" means computer software that is not designed and developed:
921          (i) by the author or other creator of the computer software; and
922          (ii) to the specifications of a specific purchaser.
923          (b) "Prewritten computer software" includes:
924          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
925     software is not designed and developed:

926          (A) by the author or other creator of the computer software; and
927          (B) to the specifications of a specific purchaser;
928          (ii) computer software designed and developed by the author or other creator of the
929     computer software to the specifications of a specific purchaser if the computer software is sold
930     to a person other than the purchaser; or
931          (iii) except as provided in Subsection [(92)] (93)(c), prewritten computer software or a
932     prewritten portion of prewritten computer software:
933          (A) that is modified or enhanced to any degree; and
934          (B) if the modification or enhancement described in Subsection [(92)] (93)(b)(iii)(A) is
935     designed and developed to the specifications of a specific purchaser.
936          (c) "Prewritten computer software" does not include a modification or enhancement
937     described in Subsection [(92)] (93)(b)(iii) if the charges for the modification or enhancement
938     are:
939          (i) reasonable; and
940          (ii) subject to Subsections 59-12-103(2)(e)(ii) and (2)(f)(i), separately stated on the
941     invoice or other statement of price provided to the purchaser at the time of sale or later, as
942     demonstrated by:
943          (A) the books and records the seller keeps at the time of the transaction in the regular
944     course of business, including books and records the seller keeps at the time of the transaction in
945     the regular course of business for nontax purposes;
946          (B) a preponderance of the facts and circumstances at the time of the transaction; and
947          (C) the understanding of all of the parties to the transaction.
948          [(93)] (94) (a) "Private communication service" means a telecommunications service:
949          (i) that entitles a customer to exclusive or priority use of one or more communications
950     channels between or among termination points; and
951          (ii) regardless of the manner in which the one or more communications channels are
952     connected.
953          (b) "Private communications service" includes the following provided in connection

954     with the use of one or more communications channels:
955          (i) an extension line;
956          (ii) a station;
957          (iii) switching capacity; or
958          (iv) another associated service that is provided in connection with the use of one or
959     more communications channels as defined in Section 59-12-215.
960          [(94)] (95) (a) Except as provided in Subsection [(94)] (95)(b), "product transferred
961     electronically" means a product transferred electronically that would be subject to a tax under
962     this chapter if that product was transferred in a manner other than electronically.
963          (b) "Product transferred electronically" does not include:
964          (i) an ancillary service;
965          (ii) computer software; or
966          (iii) a telecommunications service.
967          [(95)] (96) (a) "Prosthetic device" means a device that is worn on or in the body to:
968          (i) artificially replace a missing portion of the body;
969          (ii) prevent or correct a physical deformity or physical malfunction; or
970          (iii) support a weak or deformed portion of the body.
971          (b) "Prosthetic device" includes:
972          (i) parts used in the repairs or renovation of a prosthetic device;
973          (ii) replacement parts for a prosthetic device;
974          (iii) a dental prosthesis; or
975          (iv) a hearing aid.
976          (c) "Prosthetic device" does not include:
977          (i) corrective eyeglasses; or
978          (ii) contact lenses.
979          [(96)] (97) (a) "Protective equipment" means an item:
980          (i) for human wear; and
981          (ii) that is:

982          (A) designed as protection:
983          (I) to the wearer against injury or disease; or
984          (II) against damage or injury of other persons or property; and
985          (B) not suitable for general use.
986          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
987     commission shall make rules:
988          (i) listing the items that constitute "protective equipment"; and
989          (ii) that are consistent with the list of items that constitute "protective equipment"
990     under the agreement.
991          [(97)] (98) (a) For purposes of Subsection 59-12-104(41), "publication" means any
992     written or printed matter, other than a photocopy:
993          (i) regardless of:
994          (A) characteristics;
995          (B) copyright;
996          (C) form;
997          (D) format;
998          (E) method of reproduction; or
999          (F) source; and
1000          (ii) made available in printed or electronic format.
1001          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1002     commission may by rule define the term "photocopy."
1003          [(98)] (99) (a) "Purchase price" and "sales price" mean the total amount of
1004     consideration:
1005          (i) valued in money; and
1006          (ii) for which tangible personal property, a product transferred electronically, or
1007     services are:
1008          (A) sold;
1009          (B) leased; or

1010          (C) rented.
1011          (b) "Purchase price" and "sales price" include:
1012          (i) the seller's cost of the tangible personal property, a product transferred
1013     electronically, or services sold;
1014          (ii) expenses of the seller, including:
1015          (A) the cost of materials used;
1016          (B) a labor cost;
1017          (C) a service cost;
1018          (D) interest;
1019          (E) a loss;
1020          (F) the cost of transportation to the seller; or
1021          (G) a tax imposed on the seller;
1022          (iii) a charge by the seller for any service necessary to complete the sale; or
1023          (iv) consideration a seller receives from a person other than the purchaser if:
1024          (A) (I) the seller actually receives consideration from a person other than the purchaser;
1025     and
1026          (II) the consideration described in Subsection [(98)] (99)(b)(iv)(A)(I) is directly related
1027     to a price reduction or discount on the sale;
1028          (B) the seller has an obligation to pass the price reduction or discount through to the
1029     purchaser;
1030          (C) the amount of the consideration attributable to the sale is fixed and determinable by
1031     the seller at the time of the sale to the purchaser; and
1032          (D) (I) (Aa) the purchaser presents a certificate, coupon, or other documentation to the
1033     seller to claim a price reduction or discount; and
1034          (Bb) a person other than the seller authorizes, distributes, or grants the certificate,
1035     coupon, or other documentation with the understanding that the person other than the seller
1036     will reimburse any seller to whom the certificate, coupon, or other documentation is presented;
1037          (II) the purchaser identifies that purchaser to the seller as a member of a group or

1038     organization allowed a price reduction or discount, except that a preferred customer card that is
1039     available to any patron of a seller does not constitute membership in a group or organization
1040     allowed a price reduction or discount; or
1041          (III) the price reduction or discount is identified as a third party price reduction or
1042     discount on the:
1043          (Aa) invoice the purchaser receives; or
1044          (Bb) certificate, coupon, or other documentation the purchaser presents.
1045          (c) "Purchase price" and "sales price" do not include:
1046          (i) a discount:
1047          (A) in a form including:
1048          (I) cash;
1049          (II) term; or
1050          (III) coupon;
1051          (B) that is allowed by a seller;
1052          (C) taken by a purchaser on a sale; and
1053          (D) that is not reimbursed by a third party; or
1054          (ii) subject to Subsections 59-12-103(2)(e)(ii) and (2)(f)(i), the following if separately
1055     stated on an invoice, bill of sale, or similar document provided to the purchaser at the time of
1056     sale or later, as demonstrated by the books and records the seller keeps at the time of the
1057     transaction in the regular course of business, including books and records the seller keeps at the
1058     time of the transaction in the regular course of business for nontax purposes, by a
1059     preponderance of the facts and circumstances at the time of the transaction, and by the
1060     understanding of all of the parties to the transaction:
1061          (A) the following from credit extended on the sale of tangible personal property or
1062     services:
1063          (I) a carrying charge;
1064          (II) a financing charge; or
1065          (III) an interest charge;

1066          (B) a delivery charge;
1067          (C) an installation charge;
1068          (D) a manufacturer rebate on a motor vehicle; or
1069          (E) a tax or fee legally imposed directly on the consumer.
1070          [(99)] (100) "Purchaser" means a person to whom:
1071          (a) a sale of tangible personal property is made;
1072          (b) a product is transferred electronically; or
1073          (c) a service is furnished.
1074          [(100)] (101) "Regularly rented" means:
1075          (a) rented to a guest for value three or more times during a calendar year; or
1076          (b) advertised or held out to the public as a place that is regularly rented to guests for
1077     value.
1078          [(101)] (102) "Rental" is as defined in Subsection [(58)] (59).
1079          [(102)] (103) (a) Except as provided in Subsection [(102)] (103)(b), "repairs or
1080     renovations of tangible personal property" means:
1081          (i) a repair or renovation of tangible personal property that is not permanently attached
1082     to real property; or
1083          (ii) attaching tangible personal property or a product transferred electronically to other
1084     tangible personal property or detaching tangible personal property or a product transferred
1085     electronically from other tangible personal property if:
1086          (A) the other tangible personal property to which the tangible personal property or
1087     product transferred electronically is attached or from which the tangible personal property or
1088     product transferred electronically is detached is not permanently attached to real property; and
1089          (B) the attachment of tangible personal property or a product transferred electronically
1090     to other tangible personal property or detachment of tangible personal property or a product
1091     transferred electronically from other tangible personal property is made in conjunction with a
1092     repair or replacement of tangible personal property or a product transferred electronically.
1093          (b) "Repairs or renovations of tangible personal property" does not include:

1094          (i) attaching prewritten computer software to other tangible personal property if the
1095     other tangible personal property to which the prewritten computer software is attached is not
1096     permanently attached to real property; or
1097          (ii) detaching prewritten computer software from other tangible personal property if the
1098     other tangible personal property from which the prewritten computer software is detached is
1099     not permanently attached to real property.
1100          [(103)] (104) "Research and development" means the process of inquiry or
1101     experimentation aimed at the discovery of facts, devices, technologies, or applications and the
1102     process of preparing those devices, technologies, or applications for marketing.
1103          [(104)] (105) (a) "Residential telecommunications services" means a
1104     telecommunications service or an ancillary service that is provided to an individual for personal
1105     use:
1106          (i) at a residential address; or
1107          (ii) at an institution, including a nursing home or a school, if the telecommunications
1108     service or ancillary service is provided to and paid for by the individual residing at the
1109     institution rather than the institution.
1110          (b) For purposes of Subsection [(104)] (105)(a)(i), a residential address includes an:
1111          (i) apartment; or
1112          (ii) other individual dwelling unit.
1113          [(105)] (106) "Residential use" means the use in or around a home, apartment building,
1114     sleeping quarters, and similar facilities or accommodations.
1115          [(106)] (107) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose
1116     other than:
1117          (a) resale;
1118          (b) sublease; or
1119          (c) subrent.
1120          [(107)] (108) (a) "Retailer" means any person engaged in a regularly organized
1121     business in tangible personal property or any other taxable transaction under Subsection

1122     59-12-103(1), and who is selling to the user or consumer and not for resale.
1123          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
1124     engaged in the business of selling to users or consumers within the state.
1125          [(108)] (109) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
1126     otherwise, in any manner, of tangible personal property or any other taxable transaction under
1127     Subsection 59-12-103(1), for consideration.
1128          (b) "Sale" includes:
1129          (i) installment and credit sales;
1130          (ii) any closed transaction constituting a sale;
1131          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
1132     chapter;
1133          (iv) any transaction if the possession of property is transferred but the seller retains the
1134     title as security for the payment of the price; and
1135          (v) any transaction under which right to possession, operation, or use of any article of
1136     tangible personal property is granted under a lease or contract and the transfer of possession
1137     would be taxable if an outright sale were made.
1138          [(109)] (110) "Sale at retail" is as defined in Subsection [(106)] (107).
1139          [(110)] (111) "Sale-leaseback transaction" means a transaction by which title to
1140     tangible personal property or a product transferred electronically that is subject to a tax under
1141     this chapter is transferred:
1142          (a) by a purchaser-lessee;
1143          (b) to a lessor;
1144          (c) for consideration; and
1145          (d) if:
1146          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
1147     of the tangible personal property or product transferred electronically;
1148          (ii) the sale of the tangible personal property or product transferred electronically to the
1149     lessor is intended as a form of financing:

1150          (A) for the tangible personal property or product transferred electronically; and
1151          (B) to the purchaser-lessee; and
1152          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
1153     is required to:
1154          (A) capitalize the tangible personal property or product transferred electronically for
1155     financial reporting purposes; and
1156          (B) account for the lease payments as payments made under a financing arrangement.
1157          [(111)] (112) "Sales price" is as defined in Subsection [(98)] (99).
1158          [(112)] (113) (a) "Sales relating to schools" means the following sales by, amounts
1159     paid to, or amounts charged by a school:
1160          (i) sales that are directly related to the school's educational functions or activities
1161     including:
1162          (A) the sale of:
1163          (I) textbooks;
1164          (II) textbook fees;
1165          (III) laboratory fees;
1166          (IV) laboratory supplies; or
1167          (V) safety equipment;
1168          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
1169     that:
1170          (I) a student is specifically required to wear as a condition of participation in a
1171     school-related event or school-related activity; and
1172          (II) is not readily adaptable to general or continued usage to the extent that it takes the
1173     place of ordinary clothing;
1174          (C) sales of the following if the net or gross revenues generated by the sales are
1175     deposited into a school district fund or school fund dedicated to school meals:
1176          (I) food and food ingredients; or
1177          (II) prepared food; or

1178          (D) transportation charges for official school activities; or
1179          (ii) amounts paid to or amounts charged by a school for admission to a school-related
1180     event or school-related activity.
1181          (b) "Sales relating to schools" does not include:
1182          (i) bookstore sales of items that are not educational materials or supplies;
1183          (ii) except as provided in Subsection [(112)] (113)(a)(i)(B):
1184          (A) clothing;
1185          (B) clothing accessories or equipment;
1186          (C) protective equipment; or
1187          (D) sports or recreational equipment; or
1188          (iii) amounts paid to or amounts charged by a school for admission to a school-related
1189     event or school-related activity if the amounts paid or charged are passed through to a person:
1190          (A) other than a:
1191          (I) school;
1192          (II) nonprofit organization authorized by a school board or a governing body of a
1193     private school to organize and direct a competitive secondary school activity; or
1194          (III) nonprofit association authorized by a school board or a governing body of a
1195     private school to organize and direct a competitive secondary school activity; and
1196          (B) that is required to collect sales and use taxes under this chapter.
1197          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1198     commission may make rules defining the term "passed through."
1199          [(113)] (114) For purposes of this section and Section 59-12-104, "school":
1200          (a) means:
1201          (i) an elementary school or a secondary school that:
1202          (A) is a:
1203          (I) public school; or
1204          (II) private school; and
1205          (B) provides instruction for one or more grades kindergarten through 12; or

1206          (ii) a public school district; and
1207          (b) includes the Electronic High School as defined in Section 53A-15-1002.
1208          [(114)] (115) "Seller" means a person that makes a sale, lease, or rental of:
1209          (a) tangible personal property;
1210          (b) a product transferred electronically; or
1211          (c) a service.
1212          [(115)] (116) (a) "Semiconductor fabricating, processing, research, or development
1213     materials" means tangible personal property or a product transferred electronically if the
1214     tangible personal property or product transferred electronically is:
1215          (i) used primarily in the process of:
1216          (A) (I) manufacturing a semiconductor;
1217          (II) fabricating a semiconductor; or
1218          (III) research or development of a:
1219          (Aa) semiconductor; or
1220          (Bb) semiconductor manufacturing process; or
1221          (B) maintaining an environment suitable for a semiconductor; or
1222          (ii) consumed primarily in the process of:
1223          (A) (I) manufacturing a semiconductor;
1224          (II) fabricating a semiconductor; or
1225          (III) research or development of a:
1226          (Aa) semiconductor; or
1227          (Bb) semiconductor manufacturing process; or
1228          (B) maintaining an environment suitable for a semiconductor.
1229          (b) "Semiconductor fabricating, processing, research, or development materials"
1230     includes:
1231          (i) parts used in the repairs or renovations of tangible personal property or a product
1232     transferred electronically described in Subsection [(115)] (116)(a); or
1233          (ii) a chemical, catalyst, or other material used to:

1234          (A) produce or induce in a semiconductor a:
1235          (I) chemical change; or
1236          (II) physical change;
1237          (B) remove impurities from a semiconductor; or
1238          (C) improve the marketable condition of a semiconductor.
1239          [(116)] (117) "Senior citizen center" means a facility having the primary purpose of
1240     providing services to the aged as defined in Section 62A-3-101.
1241          [(117)] (118) (a) Subject to Subsections [(117)] (118)(b) and (c), "short-term lodging
1242     consumable" means tangible personal property that:
1243          (i) a business that provides accommodations and services described in Subsection
1244     59-12-103(1)(i) purchases as part of a transaction to provide the accommodations and services
1245     to a purchaser;
1246          (ii) is intended to be consumed by the purchaser; and
1247          (iii) is:
1248          (A) included in the purchase price of the accommodations and services; and
1249          (B) not separately stated on an invoice, bill of sale, or other similar document provided
1250     to the purchaser.
1251          (b) "Short-term lodging consumable" includes:
1252          (i) a beverage;
1253          (ii) a brush or comb;
1254          (iii) a cosmetic;
1255          (iv) a hair care product;
1256          (v) lotion;
1257          (vi) a magazine;
1258          (vii) makeup;
1259          (viii) a meal;
1260          (ix) mouthwash;
1261          (x) nail polish remover;

1262          (xi) a newspaper;
1263          (xii) a notepad;
1264          (xiii) a pen;
1265          (xiv) a pencil;
1266          (xv) a razor;
1267          (xvi) saline solution;
1268          (xvii) a sewing kit;
1269          (xviii) shaving cream;
1270          (xix) a shoe shine kit;
1271          (xx) a shower cap;
1272          (xxi) a snack item;
1273          (xxii) soap;
1274          (xxiii) toilet paper;
1275          (xxiv) a toothbrush;
1276          (xxv) toothpaste; or
1277          (xxvi) an item similar to Subsections [(117)] (118)(b)(i) through (xxv) as the
1278     commission may provide by rule made in accordance with Title 63G, Chapter 3, Utah
1279     Administrative Rulemaking Act.
1280          (c) "Short-term lodging consumable" does not include:
1281          (i) tangible personal property that is cleaned or washed to allow the tangible personal
1282     property to be reused; or
1283          (ii) a product transferred electronically.
1284          [(118)] (119) "Simplified electronic return" means the electronic return:
1285          (a) described in Section 318(C) of the agreement; and
1286          (b) approved by the governing board of the agreement.
1287          [(119)] (120) "Solar energy" means the sun used as the sole source of energy for
1288     producing electricity.
1289          [(120)] (121) (a) "Sports or recreational equipment" means an item:

1290          (i) designed for human use; and
1291          (ii) that is:
1292          (A) worn in conjunction with:
1293          (I) an athletic activity; or
1294          (II) a recreational activity; and
1295          (B) not suitable for general use.
1296          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1297     commission shall make rules:
1298          (i) listing the items that constitute "sports or recreational equipment"; and
1299          (ii) that are consistent with the list of items that constitute "sports or recreational
1300     equipment" under the agreement.
1301          [(121)] (122) "State" means the state of Utah, its departments, and agencies.
1302          [(122)] (123) "Storage" means any keeping or retention of tangible personal property or
1303     any other taxable transaction under Subsection 59-12-103(1), in this state for any purpose
1304     except sale in the regular course of business.
1305          [(123)] (124) (a) Except as provided in Subsection [(123)] (124)(d) or (e), "tangible
1306     personal property" means personal property that:
1307          (i) may be:
1308          (A) seen;
1309          (B) weighed;
1310          (C) measured;
1311          (D) felt; or
1312          (E) touched; or
1313          (ii) is in any manner perceptible to the senses.
1314          (b) "Tangible personal property" includes:
1315          (i) electricity;
1316          (ii) water;
1317          (iii) gas;

1318          (iv) steam; or
1319          (v) prewritten computer software, regardless of the manner in which the prewritten
1320     computer software is transferred.
1321          (c) "Tangible personal property" includes the following regardless of whether the item
1322     is attached to real property:
1323          (i) a dishwasher;
1324          (ii) a dryer;
1325          (iii) a freezer;
1326          (iv) a microwave;
1327          (v) a refrigerator;
1328          (vi) a stove;
1329          (vii) a washer; or
1330          (viii) an item similar to Subsections [(123)] (124)(c)(i) through (vii) as determined by
1331     the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
1332     Rulemaking Act.
1333          (d) "Tangible personal property" does not include a product that is transferred
1334     electronically.
1335          (e) "Tangible personal property" does not include the following if attached to real
1336     property, regardless of whether the attachment to real property is only through a line that
1337     supplies water, electricity, gas, telephone, cable, or supplies a similar item as determined by the
1338     commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
1339     Rulemaking Act:
1340          (i) a hot water heater;
1341          (ii) a water filtration system; or
1342          (iii) a water softener system.
1343          [(124)] (125) (a) "Telecommunications enabling or facilitating equipment, machinery,
1344     or software" means an item listed in Subsection [(124)] (125)(b) if that item is purchased or
1345     leased primarily to enable or facilitate one or more of the following to function:

1346          (i) telecommunications switching or routing equipment, machinery, or software; or
1347          (ii) telecommunications transmission equipment, machinery, or software.
1348          (b) The following apply to Subsection [(124)] (125)(a):
1349          (i) a pole;
1350          (ii) software;
1351          (iii) a supplementary power supply;
1352          (iv) temperature or environmental equipment or machinery;
1353          (v) test equipment;
1354          (vi) a tower; or
1355          (vii) equipment, machinery, or software that functions similarly to an item listed in
1356     Subsections [(124)] (125)(b)(i) through (vi) as determined by the commission by rule made in
1357     accordance with Subsection [(124)] (125)(c).
1358          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1359     commission may by rule define what constitutes equipment, machinery, or software that
1360     functions similarly to an item listed in Subsections [(124)] (125)(b)(i) through (vi).
1361          [(125)] (126) "Telecommunications equipment, machinery, or software required for
1362     911 service" means equipment, machinery, or software that is required to comply with 47
1363     C.F.R. Sec. 20.18.
1364          [(126)] (127) "Telecommunications maintenance or repair equipment, machinery, or
1365     software" means equipment, machinery, or software purchased or leased primarily to maintain
1366     or repair one or more of the following, regardless of whether the equipment, machinery, or
1367     software is purchased or leased as a spare part or as an upgrade or modification to one or more
1368     of the following:
1369          (a) telecommunications enabling or facilitating equipment, machinery, or software;
1370          (b) telecommunications switching or routing equipment, machinery, or software; or
1371          (c) telecommunications transmission equipment, machinery, or software.
1372          [(127)] (128) (a) "Telecommunications service" means the electronic conveyance,
1373     routing, or transmission of audio, data, video, voice, or any other information or signal to a

1374     point, or among or between points.
1375          (b) "Telecommunications service" includes:
1376          (i) an electronic conveyance, routing, or transmission with respect to which a computer
1377     processing application is used to act:
1378          (A) on the code, form, or protocol of the content;
1379          (B) for the purpose of electronic conveyance, routing, or transmission; and
1380          (C) regardless of whether the service:
1381          (I) is referred to as voice over Internet protocol service; or
1382          (II) is classified by the Federal Communications Commission as enhanced or value
1383     added;
1384          (ii) an 800 service;
1385          (iii) a 900 service;
1386          (iv) a fixed wireless service;
1387          (v) a mobile wireless service;
1388          (vi) a postpaid calling service;
1389          (vii) a prepaid calling service;
1390          (viii) a prepaid wireless calling service; or
1391          (ix) a private communications service.
1392          (c) "Telecommunications service" does not include:
1393          (i) advertising, including directory advertising;
1394          (ii) an ancillary service;
1395          (iii) a billing and collection service provided to a third party;
1396          (iv) a data processing and information service if:
1397          (A) the data processing and information service allows data to be:
1398          (I) (Aa) acquired;
1399          (Bb) generated;
1400          (Cc) processed;
1401          (Dd) retrieved; or

1402          (Ee) stored; and
1403          (II) delivered by an electronic transmission to a purchaser; and
1404          (B) the purchaser's primary purpose for the underlying transaction is the processed data
1405     or information;
1406          (v) installation or maintenance of the following on a customer's premises:
1407          (A) equipment; or
1408          (B) wiring;
1409          (vi) Internet access service;
1410          (vii) a paging service;
1411          (viii) a product transferred electronically, including:
1412          (A) music;
1413          (B) reading material;
1414          (C) a ring tone;
1415          (D) software; or
1416          (E) video;
1417          (ix) a radio and television audio and video programming service:
1418          (A) regardless of the medium; and
1419          (B) including:
1420          (I) furnishing conveyance, routing, or transmission of a television audio and video
1421     programming service by a programming service provider;
1422          (II) cable service as defined in 47 U.S.C. Sec. 522(6); or
1423          (III) audio and video programming services delivered by a commercial mobile radio
1424     service provider as defined in 47 C.F.R. Sec. 20.3;
1425          (x) a value-added nonvoice data service; or
1426          (xi) tangible personal property.
1427          [(128)] (129) (a) "Telecommunications service provider" means a person that:
1428          (i) owns, controls, operates, or manages a telecommunications service; and
1429          (ii) engages in an activity described in Subsection [(128)] (129)(a)(i) for the shared use

1430     with or resale to any person of the telecommunications service.
1431          (b) A person described in Subsection [(128)] (129)(a) is a telecommunications service
1432     provider whether or not the Public Service Commission of Utah regulates:
1433          (i) that person; or
1434          (ii) the telecommunications service that the person owns, controls, operates, or
1435     manages.
1436          [(129)] (130) (a) "Telecommunications switching or routing equipment, machinery, or
1437     software" means an item listed in Subsection [(129)] (130)(b) if that item is purchased or
1438     leased primarily for switching or routing:
1439          (i) an ancillary service;
1440          (ii) data communications;
1441          (iii) voice communications; or
1442          (iv) telecommunications service.
1443          (b) The following apply to Subsection [(129)] (130)(a):
1444          (i) a bridge;
1445          (ii) a computer;
1446          (iii) a cross connect;
1447          (iv) a modem;
1448          (v) a multiplexer;
1449          (vi) plug in circuitry;
1450          (vii) a router;
1451          (viii) software;
1452          (ix) a switch; or
1453          (x) equipment, machinery, or software that functions similarly to an item listed in
1454     Subsections [(129)] (130)(b)(i) through (ix) as determined by the commission by rule made in
1455     accordance with Subsection [(129)] (130)(c).
1456          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1457     commission may by rule define what constitutes equipment, machinery, or software that

1458     functions similarly to an item listed in Subsections [(129)] (130)(b)(i) through (ix).
1459          [(130)] (131) (a) "Telecommunications transmission equipment, machinery, or
1460     software" means an item listed in Subsection [(130)] (131)(b) if that item is purchased or
1461     leased primarily for sending, receiving, or transporting:
1462          (i) an ancillary service;
1463          (ii) data communications;
1464          (iii) voice communications; or
1465          (iv) telecommunications service.
1466          (b) The following apply to Subsection [(130)] (131)(a):
1467          (i) an amplifier;
1468          (ii) a cable;
1469          (iii) a closure;
1470          (iv) a conduit;
1471          (v) a controller;
1472          (vi) a duplexer;
1473          (vii) a filter;
1474          (viii) an input device;
1475          (ix) an input/output device;
1476          (x) an insulator;
1477          (xi) microwave machinery or equipment;
1478          (xii) an oscillator;
1479          (xiii) an output device;
1480          (xiv) a pedestal;
1481          (xv) a power converter;
1482          (xvi) a power supply;
1483          (xvii) a radio channel;
1484          (xviii) a radio receiver;
1485          (xix) a radio transmitter;

1486          (xx) a repeater;
1487          (xxi) software;
1488          (xxii) a terminal;
1489          (xxiii) a timing unit;
1490          (xxiv) a transformer;
1491          (xxv) a wire; or
1492          (xxvi) equipment, machinery, or software that functions similarly to an item listed in
1493     Subsections [(130)] (131)(b)(i) through (xxv) as determined by the commission by rule made in
1494     accordance with Subsection [(130)] (131)(c).
1495          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1496     commission may by rule define what constitutes equipment, machinery, or software that
1497     functions similarly to an item listed in Subsections [(130)] (131)(b)(i) through (xxv).
1498          [(131)] (132) (a) "Textbook for a higher education course" means a textbook or other
1499     printed material that is required for a course:
1500          (i) offered by an institution of higher education; and
1501          (ii) that the purchaser of the textbook or other printed material attends or will attend.
1502          (b) "Textbook for a higher education course" includes a textbook in electronic format.
1503          [(132)] (133) "Tobacco" means:
1504          (a) a cigarette;
1505          (b) a cigar;
1506          (c) chewing tobacco;
1507          (d) pipe tobacco; or
1508          (e) any other item that contains tobacco.
1509          [(133)] (134) "Unassisted amusement device" means an amusement device, skill
1510     device, or ride device that is started and stopped by the purchaser or renter of the right to use or
1511     operate the amusement device, skill device, or ride device.
1512          [(134)] (135) (a) "Use" means the exercise of any right or power over tangible personal
1513     property, a product transferred electronically, or a service under Subsection 59-12-103(1),

1514     incident to the ownership or the leasing of that tangible personal property, product transferred
1515     electronically, or service.
1516          (b) "Use" does not include the sale, display, demonstration, or trial of tangible personal
1517     property, a product transferred electronically, or a service in the regular course of business and
1518     held for resale.
1519          [(135)] (136) "Value-added nonvoice data service" means a service:
1520          (a) that otherwise meets the definition of a telecommunications service except that a
1521     computer processing application is used to act primarily for a purpose other than conveyance,
1522     routing, or transmission; and
1523          (b) with respect to which a computer processing application is used to act on data or
1524     information:
1525          (i) code;
1526          (ii) content;
1527          (iii) form; or
1528          (iv) protocol.
1529          [(136)] (137) (a) Subject to Subsection [(136)] (137)(b), "vehicle" means the following
1530     that are required to be titled, registered, or titled and registered:
1531          (i) an aircraft as defined in Section 72-10-102;
1532          (ii) a vehicle as defined in Section 41-1a-102;
1533          (iii) an off-highway vehicle as defined in Section 41-22-2; or
1534          (iv) a vessel as defined in Section 41-1a-102.
1535          (b) For purposes of Subsection 59-12-104(33) only, "vehicle" includes:
1536          (i) a vehicle described in Subsection [(136)] (137)(a); or
1537          (ii) (A) a locomotive;
1538          (B) a freight car;
1539          (C) railroad work equipment; or
1540          (D) other railroad rolling stock.
1541          [(137)] (138) "Vehicle dealer" means a person engaged in the business of buying,

1542     selling, or exchanging a vehicle as defined in Subsection [(136)] (137).
1543          [(138)] (139) (a) "Vertical service" means an ancillary service that:
1544          (i) is offered in connection with one or more telecommunications services; and
1545          (ii) offers an advanced calling feature that allows a customer to:
1546          (A) identify a caller; and
1547          (B) manage multiple calls and call connections.
1548          (b) "Vertical service" includes an ancillary service that allows a customer to manage a
1549     conference bridging service.
1550          [(139)] (140) (a) "Voice mail service" means an ancillary service that enables a
1551     customer to receive, send, or store a recorded message.
1552          (b) "Voice mail service" does not include a vertical service that a customer is required
1553     to have in order to utilize a voice mail service.
1554          [(140)] (141) (a) Except as provided in Subsection [(140)] (141)(b), "waste energy
1555     facility" means a facility that generates electricity:
1556          (i) using as the primary source of energy waste materials that would be placed in a
1557     landfill or refuse pit if it were not used to generate electricity, including:
1558          (A) tires;
1559          (B) waste coal;
1560          (C) oil shale; or
1561          (D) municipal solid waste; and
1562          (ii) in amounts greater than actually required for the operation of the facility.
1563          (b) "Waste energy facility" does not include a facility that incinerates:
1564          (i) hospital waste as defined in 40 C.F.R. 60.51c; or
1565          (ii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
1566          [(141)] (142) "Watercraft" means a vessel as defined in Section 73-18-2.
1567          [(142)] (143) "Wind energy" means wind used as the sole source of energy to produce
1568     electricity.
1569          [(143)] (144) "ZIP Code" means a Zoning Improvement Plan Code assigned to a

1570     geographic location by the United States Postal Service.
1571          Section 2. Section 59-12-104 is amended to read:
1572          59-12-104. Exemptions.
1573          Exemptions from the taxes imposed by this chapter are as follows:
1574          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
1575     under Chapter 13, Motor and Special Fuel Tax Act;
1576          (2) subject to Section 59-12-104.6, sales to the state, its institutions, and its political
1577     subdivisions; however, this exemption does not apply to sales of:
1578          (a) construction materials except:
1579          (i) construction materials purchased by or on behalf of institutions of the public
1580     education system as defined in Utah Constitution Article X, Section 2, provided the
1581     construction materials are clearly identified and segregated and installed or converted to real
1582     property which is owned by institutions of the public education system; and
1583          (ii) construction materials purchased by the state, its institutions, or its political
1584     subdivisions which are installed or converted to real property by employees of the state, its
1585     institutions, or its political subdivisions; or
1586          (b) tangible personal property in connection with the construction, operation,
1587     maintenance, repair, or replacement of a project, as defined in Section 11-13-103, or facilities
1588     providing additional project capacity, as defined in Section 11-13-103;
1589          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
1590          (i) the proceeds of each sale do not exceed $1; and
1591          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
1592     the cost of the item described in Subsection (3)(b) as goods consumed; and
1593          (b) Subsection (3)(a) applies to:
1594          (i) food and food ingredients; or
1595          (ii) prepared food;
1596          (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
1597          (i) alcoholic beverages;

1598          (ii) food and food ingredients; or
1599          (iii) prepared food;
1600          (b) sales of tangible personal property or a product transferred electronically:
1601          (i) to a passenger;
1602          (ii) by a commercial airline carrier; and
1603          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
1604          (c) services related to Subsection (4)(a) or (b);
1605          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
1606     and equipment:
1607          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
1608     North American Industry Classification System of the federal Executive Office of the
1609     President, Office of Management and Budget; and
1610          (II) for:
1611          (Aa) installation in an aircraft, including services relating to the installation of parts or
1612     equipment in the aircraft;
1613          (Bb) renovation of an aircraft; or
1614          (Cc) repair of an aircraft; or
1615          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
1616     commerce; or
1617          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
1618     aircraft operated by a common carrier in interstate or foreign commerce; and
1619          (b) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund,
1620     a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
1621     refund:
1622          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
1623          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
1624          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
1625     the sale prior to filing for the refund;

1626          (iv) for sales and use taxes paid under this chapter on the sale;
1627          (v) in accordance with Section 59-1-1410; and
1628          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410, if
1629     the person files for the refund on or before September 30, 2011;
1630          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
1631     records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
1632     exhibitor, distributor, or commercial television or radio broadcaster;
1633          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
1634     property if the cleaning or washing of the tangible personal property is not assisted cleaning or
1635     washing of tangible personal property;
1636          (b) if a seller that sells at the same business location assisted cleaning or washing of
1637     tangible personal property and cleaning or washing of tangible personal property that is not
1638     assisted cleaning or washing of tangible personal property, the exemption described in
1639     Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
1640     or washing of the tangible personal property; and
1641          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
1642     Utah Administrative Rulemaking Act, the commission may make rules:
1643          (i) governing the circumstances under which sales are at the same business location;
1644     and
1645          (ii) establishing the procedures and requirements for a seller to separately account for
1646     sales of assisted cleaning or washing of tangible personal property;
1647          (8) sales made to or by religious or charitable institutions in the conduct of their regular
1648     religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
1649     fulfilled;
1650          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
1651     this state if the vehicle is:
1652          (a) not registered in this state; and
1653          (b) (i) not used in this state; or

1654          (ii) used in this state:
1655          (A) if the vehicle is not used to conduct business, for a time period that does not
1656     exceed the longer of:
1657          (I) 30 days in any calendar year; or
1658          (II) the time period necessary to transport the vehicle to the borders of this state; or
1659          (B) if the vehicle is used to conduct business, for the time period necessary to transport
1660     the vehicle to the borders of this state;
1661          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
1662          (i) the item is intended for human use; and
1663          (ii) (A) a prescription was issued for the item; or
1664          (B) the item was purchased by a hospital or other medical facility; and
1665          (b) (i) Subsection (10)(a) applies to:
1666          (A) a drug;
1667          (B) a syringe; or
1668          (C) a stoma supply; and
1669          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1670     commission may by rule define the terms:
1671          (A) "syringe"; or
1672          (B) "stoma supply";
1673          (11) purchases or leases exempt under Section 19-12-201;
1674          (12) (a) sales of an item described in Subsection (12)(c) served by:
1675          (i) the following if the item described in Subsection (12)(c) is not available to the
1676     general public:
1677          (A) a church; or
1678          (B) a charitable institution;
1679          (ii) an institution of higher education if:
1680          (A) the item described in Subsection (12)(c) is not available to the general public; or
1681          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan

1682     offered by the institution of higher education; or
1683          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
1684          (i) a medical facility; or
1685          (ii) a nursing facility; and
1686          (c) Subsections (12)(a) and (b) apply to:
1687          (i) food and food ingredients;
1688          (ii) prepared food; or
1689          (iii) alcoholic beverages;
1690          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
1691     or a product transferred electronically by a person:
1692          (i) regardless of the number of transactions involving the sale of that tangible personal
1693     property or product transferred electronically by that person; and
1694          (ii) not regularly engaged in the business of selling that type of tangible personal
1695     property or product transferred electronically;
1696          (b) this Subsection (13) does not apply if:
1697          (i) the sale is one of a series of sales of a character to indicate that the person is
1698     regularly engaged in the business of selling that type of tangible personal property or product
1699     transferred electronically;
1700          (ii) the person holds that person out as regularly engaged in the business of selling that
1701     type of tangible personal property or product transferred electronically;
1702          (iii) the person sells an item of tangible personal property or product transferred
1703     electronically that the person purchased as a sale that is exempt under Subsection (25); or
1704           (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
1705     this state in which case the tax is based upon:
1706          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
1707     sold; or
1708          (B) in the absence of a bill of sale or other written evidence of value, the fair market
1709     value of the vehicle or vessel being sold at the time of the sale as determined by the

1710     commission; and
1711          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1712     commission shall make rules establishing the circumstances under which:
1713          (i) a person is regularly engaged in the business of selling a type of tangible personal
1714     property or product transferred electronically;
1715          (ii) a sale of tangible personal property or a product transferred electronically is one of
1716     a series of sales of a character to indicate that a person is regularly engaged in the business of
1717     selling that type of tangible personal property or product transferred electronically; or
1718          (iii) a person holds that person out as regularly engaged in the business of selling a type
1719     of tangible personal property or product transferred electronically;
1720          (14) (a) amounts paid or charged for a purchase or lease:
1721          (i) by a manufacturing facility located in the state; and
1722          (ii) of machinery, equipment, or normal operating repair or replacement parts if the
1723     machinery, equipment, or normal operating repair or replacement parts have an economic life
1724     of three or more years and are used:
1725          (A) in the manufacturing process to manufacture an item sold as tangible personal
1726     property; or
1727          (B) for a scrap recycler, to process an item sold as tangible personal property;
1728          (b) amounts paid or charged for a purchase or lease:
1729          (i) by an establishment:
1730          (A) described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS Code
1731     213113, Support Activities for Coal Mining, 213114, Support Activities for Metal Mining, or
1732     213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining, of the 2002 North
1733     American Industry Classification System of the federal Executive Office of the President,
1734     Office of Management and Budget; and
1735          (B) located in the state; and
1736          (ii) of machinery, equipment, or normal operating repair or replacement parts if the
1737     machinery, equipment, or normal operating repair or replacement parts have an economic life

1738     of three or more years and are used in:
1739          (A) the production process to produce an item sold as tangible personal property;
1740          (B) research and development;
1741          (C) transporting, storing, or managing tailings, overburden, or similar waste materials
1742     produced from mining;
1743          (D) developing or maintaining a road, tunnel, excavation, or similar feature used in
1744     mining; or
1745          (E) preventing, controlling, or reducing dust or other pollutants from mining;
1746          (c) amounts paid or charged for a purchase or lease:
1747          (i) by an establishment:
1748          (A) described in NAICS Code 518112, Web Search Portals, of the 2002 North
1749     American Industry Classification System of the federal Executive Office of the President,
1750     Office of Management and Budget; and
1751          (B) located in the state; and
1752          (ii) of machinery, equipment, or normal operating repair or replacement parts if the
1753     machinery, equipment, or normal operating repair or replacement parts:
1754          (A) are used in the operation of the web search portal; and
1755          (B) have an economic life of three or more years;
1756          (d) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
1757     Utah Administrative Rulemaking Act, the commission:
1758          (i) shall by rule define the term "establishment"; and
1759          (ii) may by rule define what constitutes:
1760          (A) processing an item sold as tangible personal property;
1761          (B) the production process, to produce an item sold as tangible personal property; or
1762          (C) research and development; and
1763          (e) on or before October 1, 2016, and every five years after October 1, 2016, the
1764     commission shall:
1765          (i) review the exemptions described in this Subsection (14) and make

1766     recommendations to the Revenue and Taxation Interim Committee concerning whether the
1767     exemptions should be continued, modified, or repealed; and
1768          (ii) include in its report:
1769          (A) an estimate of the cost of the exemptions;
1770          (B) the purpose and effectiveness of the exemptions; and
1771          (C) the benefits of the exemptions to the state;
1772          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
1773          (i) tooling;
1774          (ii) special tooling;
1775          (iii) support equipment;
1776          (iv) special test equipment; or
1777          (v) parts used in the repairs or renovations of tooling or equipment described in
1778     Subsections (15)(a)(i) through (iv); and
1779          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
1780          (i) the tooling, equipment, or parts are used or consumed exclusively in the
1781     performance of any aerospace or electronics industry contract with the United States
1782     government or any subcontract under that contract; and
1783          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
1784     title to the tooling, equipment, or parts is vested in the United States government as evidenced
1785     by:
1786          (A) a government identification tag placed on the tooling, equipment, or parts; or
1787          (B) listing on a government-approved property record if placing a government
1788     identification tag on the tooling, equipment, or parts is impractical;
1789          (16) sales of newspapers or newspaper subscriptions;
1790          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
1791     product transferred electronically traded in as full or part payment of the purchase price, except
1792     that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
1793     trade-ins are limited to other vehicles only, and the tax is based upon:

1794          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
1795     vehicle being traded in; or
1796          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
1797     fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
1798     commission; and
1799          (b) Subsection (17)(a) does not apply to the following items of tangible personal
1800     property or products transferred electronically traded in as full or part payment of the purchase
1801     price:
1802          (i) money;
1803          (ii) electricity;
1804          (iii) water;
1805          (iv) gas; or
1806          (v) steam;
1807          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
1808     or a product transferred electronically used or consumed primarily and directly in farming
1809     operations, regardless of whether the tangible personal property or product transferred
1810     electronically:
1811          (A) becomes part of real estate; or
1812          (B) is installed by a:
1813          (I) farmer;
1814          (II) contractor; or
1815          (III) subcontractor; or
1816          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
1817     product transferred electronically if the tangible personal property or product transferred
1818     electronically is exempt under Subsection (18)(a)(i); and
1819          (b) amounts paid or charged for the following are subject to the taxes imposed by this
1820     chapter:
1821          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is

1822     incidental to farming:
1823          (I) machinery;
1824          (II) equipment;
1825          (III) materials; or
1826          (IV) supplies; and
1827          (B) tangible personal property that is considered to be used in a manner that is
1828     incidental to farming includes:
1829          (I) hand tools; or
1830          (II) maintenance and janitorial equipment and supplies;
1831          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
1832     transferred electronically if the tangible personal property or product transferred electronically
1833     is used in an activity other than farming; and
1834          (B) tangible personal property or a product transferred electronically that is considered
1835     to be used in an activity other than farming includes:
1836          (I) office equipment and supplies; or
1837          (II) equipment and supplies used in:
1838          (Aa) the sale or distribution of farm products;
1839          (Bb) research; or
1840          (Cc) transportation; or
1841          (iii) a vehicle required to be registered by the laws of this state during the period
1842     ending two years after the date of the vehicle's purchase;
1843          (19) sales of hay;
1844          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
1845     garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
1846     garden, farm, or other agricultural produce is sold by:
1847          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
1848     agricultural produce;
1849          (b) an employee of the producer described in Subsection (20)(a); or

1850          (c) a member of the immediate family of the producer described in Subsection (20)(a);
1851          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
1852     under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
1853          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
1854     nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
1855     wholesaler, or retailer for use in packaging tangible personal property to be sold by that
1856     manufacturer, processor, wholesaler, or retailer;
1857          (23) a product stored in the state for resale;
1858          (24) (a) purchases of a product if:
1859          (i) the product is:
1860          (A) purchased outside of this state;
1861          (B) brought into this state:
1862          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
1863          (II) by a nonresident person who is not living or working in this state at the time of the
1864     purchase;
1865          (C) used for the personal use or enjoyment of the nonresident person described in
1866     Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
1867          (D) not used in conducting business in this state; and
1868          (ii) for:
1869          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
1870     the product for a purpose for which the product is designed occurs outside of this state;
1871          (B) a boat, the boat is registered outside of this state; or
1872          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
1873     outside of this state;
1874          (b) the exemption provided for in Subsection (24)(a) does not apply to:
1875          (i) a lease or rental of a product; or
1876          (ii) a sale of a vehicle exempt under Subsection (33); and
1877          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for

1878     purposes of Subsection (24)(a), the commission may by rule define what constitutes the
1879     following:
1880          (i) conducting business in this state if that phrase has the same meaning in this
1881     Subsection (24) as in Subsection (63);
1882          (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
1883     as in Subsection (63); or
1884          (iii) a purpose for which a product is designed if that phrase has the same meaning in
1885     this Subsection (24) as in Subsection (63);
1886          (25) a product purchased for resale in this state, in the regular course of business, either
1887     in its original form or as an ingredient or component part of a manufactured or compounded
1888     product;
1889          (26) a product upon which a sales or use tax was paid to some other state, or one of its
1890     subdivisions, except that the state shall be paid any difference between the tax paid and the tax
1891     imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
1892     the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
1893     Act;
1894          (27) any sale of a service described in Subsections 59-12-103(1)(b), (c), and (d) to a
1895     person for use in compounding a service taxable under the subsections;
1896          (28) purchases made in accordance with the special supplemental nutrition program for
1897     women, infants, and children established in 42 U.S.C. Sec. 1786;
1898          (29) sales or leases of rolls, rollers, refractory brick, electric motors, or other
1899     replacement parts used in the furnaces, mills, or ovens of a steel mill described in SIC Code
1900     3312 of the 1987 Standard Industrial Classification Manual of the federal Executive Office of
1901     the President, Office of Management and Budget;
1902          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
1903     Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
1904          (a) not registered in this state; and
1905          (b) (i) not used in this state; or

1906          (ii) used in this state:
1907          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
1908     time period that does not exceed the longer of:
1909          (I) 30 days in any calendar year; or
1910          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
1911     the borders of this state; or
1912          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
1913     period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
1914     state;
1915          (31) sales of aircraft manufactured in Utah;
1916          (32) amounts paid for the purchase of telecommunications service for purposes of
1917     providing telecommunications service;
1918          (33) sales, leases, or uses of the following:
1919          (a) a vehicle by an authorized carrier; or
1920          (b) tangible personal property that is installed on a vehicle:
1921          (i) sold or leased to or used by an authorized carrier; and
1922          (ii) before the vehicle is placed in service for the first time;
1923          (34) (a) 45% of the sales price of any new manufactured home; and
1924          (b) 100% of the sales price of any used manufactured home;
1925          (35) sales relating to schools and fundraising sales;
1926          (36) sales or rentals of durable medical equipment if:
1927          (a) a person presents a prescription for the durable medical equipment; and
1928          (b) the durable medical equipment is used for home use only;
1929          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
1930     Section 72-11-102; and
1931          (b) the commission shall by rule determine the method for calculating sales exempt
1932     under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
1933          (38) sales to a ski resort of:

1934          (a) snowmaking equipment;
1935          (b) ski slope grooming equipment;
1936          (c) passenger ropeways as defined in Section 72-11-102; or
1937          (d) parts used in the repairs or renovations of equipment or passenger ropeways
1938     described in Subsections (38)(a) through (c);
1939          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
1940          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
1941     amusement, entertainment, or recreation an unassisted amusement device as defined in Section
1942     59-12-102;
1943          (b) if a seller that sells or rents at the same business location the right to use or operate
1944     for amusement, entertainment, or recreation one or more unassisted amusement devices and
1945     one or more assisted amusement devices, the exemption described in Subsection (40)(a)
1946     applies if the seller separately accounts for the sales or rentals of the right to use or operate for
1947     amusement, entertainment, or recreation for the assisted amusement devices; and
1948          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
1949     Utah Administrative Rulemaking Act, the commission may make rules:
1950          (i) governing the circumstances under which sales are at the same business location;
1951     and
1952          (ii) establishing the procedures and requirements for a seller to separately account for
1953     the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
1954     assisted amusement devices;
1955          (41) (a) sales of photocopies by:
1956          (i) a governmental entity; or
1957          (ii) an entity within the state system of public education, including:
1958          (A) a school; or
1959          (B) the State Board of Education; or
1960          (b) sales of publications by a governmental entity;
1961          (42) amounts paid for admission to an athletic event at an institution of higher

1962     education that is subject to the provisions of Title IX of the Education Amendments of 1972,
1963     20 U.S.C. Sec. 1681 et seq.;
1964          (43) (a) sales made to or by:
1965          (i) an area agency on aging; or
1966          (ii) a senior citizen center owned by a county, city, or town; or
1967          (b) sales made by a senior citizen center that contracts with an area agency on aging;
1968          (44) sales or leases of semiconductor fabricating, processing, research, or development
1969     materials regardless of whether the semiconductor fabricating, processing, research, or
1970     development materials:
1971          (a) actually come into contact with a semiconductor; or
1972          (b) ultimately become incorporated into real property;
1973          (45) an amount paid by or charged to a purchaser for accommodations and services
1974     described in Subsection 59-12-103(1)(i) to the extent the amount is exempt under Section
1975     59-12-104.2;
1976          (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
1977     sports event registration certificate in accordance with Section 41-3-306 for the event period
1978     specified on the temporary sports event registration certificate;
1979          (47) (a) sales or uses of electricity, if the sales or uses are made under a tariff adopted
1980     by the Public Service Commission of Utah only for purchase of electricity produced from a
1981     new alternative energy source, as designated in the tariff by the Public Service Commission of
1982     Utah; and
1983          (b) the exemption under Subsection (47)(a) applies to the portion of the tariff rate a
1984     customer pays under the tariff described in Subsection (47)(a) that exceeds the tariff rate under
1985     the tariff described in Subsection (47)(a) that the customer would have paid absent the tariff;
1986          (48) sales or rentals of mobility enhancing equipment if a person presents a
1987     prescription for the mobility enhancing equipment;
1988          (49) sales of water in a:
1989          (a) pipe;

1990          (b) conduit;
1991          (c) ditch; or
1992          (d) reservoir;
1993          (50) sales of currency or coins that constitute legal tender of a state, the United States,
1994     or a foreign nation;
1995          (51) (a) sales of an item described in Subsection (51)(b) if the item:
1996          (i) does not constitute legal tender of a state, the United States, or a foreign nation; and
1997          (ii) has a gold, silver, or platinum content of 50% or more; and
1998          (b) Subsection (51)(a) applies to a gold, silver, or platinum:
1999          (i) ingot;
2000          (ii) bar;
2001          (iii) medallion; or
2002          (iv) decorative coin;
2003          (52) amounts paid on a sale-leaseback transaction;
2004          (53) sales of a prosthetic device:
2005          (a) for use on or in a human; and
2006          (b) (i) for which a prescription is required; or
2007          (ii) if the prosthetic device is purchased by a hospital or other medical facility;
2008          (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
2009     machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
2010     or equipment is primarily used in the production or postproduction of the following media for
2011     commercial distribution:
2012          (i) a motion picture;
2013          (ii) a television program;
2014          (iii) a movie made for television;
2015          (iv) a music video;
2016          (v) a commercial;
2017          (vi) a documentary; or

2018          (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
2019     commission by administrative rule made in accordance with Subsection (54)(d); or
2020          (b) purchases, leases, or rentals of machinery or equipment by an establishment
2021     described in Subsection (54)(c) that is used for the production or postproduction of the
2022     following are subject to the taxes imposed by this chapter:
2023          (i) a live musical performance;
2024          (ii) a live news program; or
2025          (iii) a live sporting event;
2026          (c) the following establishments listed in the 1997 North American Industry
2027     Classification System of the federal Executive Office of the President, Office of Management
2028     and Budget, apply to Subsections (54)(a) and (b):
2029          (i) NAICS Code 512110; or
2030          (ii) NAICS Code 51219; and
2031          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
2032     commission may by rule:
2033          (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
2034     or
2035          (ii) define:
2036          (A) "commercial distribution";
2037          (B) "live musical performance";
2038          (C) "live news program"; or
2039          (D) "live sporting event";
2040          (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
2041     on or before June 30, 2027, of tangible personal property that:
2042          (i) is leased or purchased for or by a facility that:
2043          (A) is an alternative energy electricity production facility;
2044          (B) is located in the state; and
2045          (C) (I) becomes operational on or after July 1, 2004; or

2046          (II) has its generation capacity increased by one or more megawatts on or after July 1,
2047     2004, as a result of the use of the tangible personal property;
2048          (ii) has an economic life of five or more years; and
2049          (iii) is used to make the facility or the increase in capacity of the facility described in
2050     Subsection (55)(a)(i) operational up to the point of interconnection with an existing
2051     transmission grid including:
2052          (A) a wind turbine;
2053          (B) generating equipment;
2054          (C) a control and monitoring system;
2055          (D) a power line;
2056          (E) substation equipment;
2057          (F) lighting;
2058          (G) fencing;
2059          (H) pipes; or
2060          (I) other equipment used for locating a power line or pole; and
2061          (b) this Subsection (55) does not apply to:
2062          (i) tangible personal property used in construction of:
2063          (A) a new alternative energy electricity production facility; or
2064          (B) the increase in the capacity of an alternative energy electricity production facility;
2065          (ii) contracted services required for construction and routine maintenance activities;
2066     and
2067          (iii) unless the tangible personal property is used or acquired for an increase in capacity
2068     of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal property used or
2069     acquired after:
2070          (A) the alternative energy electricity production facility described in Subsection
2071     (55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
2072          (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
2073     in Subsection (55)(a)(iii);

2074          (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
2075     on or before June 30, 2027, of tangible personal property that:
2076          (i) is leased or purchased for or by a facility that:
2077          (A) is a waste energy production facility;
2078          (B) is located in the state; and
2079          (C) (I) becomes operational on or after July 1, 2004; or
2080          (II) has its generation capacity increased by one or more megawatts on or after July 1,
2081     2004, as a result of the use of the tangible personal property;
2082          (ii) has an economic life of five or more years; and
2083          (iii) is used to make the facility or the increase in capacity of the facility described in
2084     Subsection (56)(a)(i) operational up to the point of interconnection with an existing
2085     transmission grid including:
2086          (A) generating equipment;
2087          (B) a control and monitoring system;
2088          (C) a power line;
2089          (D) substation equipment;
2090          (E) lighting;
2091          (F) fencing;
2092          (G) pipes; or
2093          (H) other equipment used for locating a power line or pole; and
2094          (b) this Subsection (56) does not apply to:
2095          (i) tangible personal property used in construction of:
2096          (A) a new waste energy facility; or
2097          (B) the increase in the capacity of a waste energy facility;
2098          (ii) contracted services required for construction and routine maintenance activities;
2099     and
2100          (iii) unless the tangible personal property is used or acquired for an increase in capacity
2101     described in Subsection (56)(a)(i)(C)(II), tangible personal property used or acquired after:

2102          (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
2103     described in Subsection (56)(a)(iii); or
2104          (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
2105     in Subsection (56)(a)(iii);
2106          (57) (a) leases of five or more years or purchases made on or after July 1, 2004, but on
2107     or before June 30, 2027, of tangible personal property that:
2108          (i) is leased or purchased for or by a facility that:
2109          (A) is located in the state;
2110          (B) produces fuel from alternative energy, including:
2111          (I) methanol; or
2112          (II) ethanol; and
2113          (C) (I) becomes operational on or after July 1, 2004; or
2114          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
2115     a result of the installation of the tangible personal property;
2116          (ii) has an economic life of five or more years; and
2117          (iii) is installed on the facility described in Subsection (57)(a)(i);
2118          (b) this Subsection (57) does not apply to:
2119          (i) tangible personal property used in construction of:
2120          (A) a new facility described in Subsection (57)(a)(i); or
2121          (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
2122          (ii) contracted services required for construction and routine maintenance activities;
2123     and
2124          (iii) unless the tangible personal property is used or acquired for an increase in capacity
2125     described in Subsection (57)(a)(i)(C)(II), tangible personal property used or acquired after:
2126          (A) the facility described in Subsection (57)(a)(i) is operational; or
2127          (B) the increased capacity described in Subsection (57)(a)(i) is operational;
2128          (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
2129     product transferred electronically to a person within this state if that tangible personal property

2130     or product transferred electronically is subsequently shipped outside the state and incorporated
2131     pursuant to contract into and becomes a part of real property located outside of this state;
2132          (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
2133     state or political entity to which the tangible personal property is shipped imposes a sales, use,
2134     gross receipts, or other similar transaction excise tax on the transaction against which the other
2135     state or political entity allows a credit for sales and use taxes imposed by this chapter; and
2136          (c) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund,
2137     a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
2138     refund:
2139          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
2140          (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
2141     which the sale is made;
2142          (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
2143     sale prior to filing for the refund;
2144          (iv) for sales and use taxes paid under this chapter on the sale;
2145          (v) in accordance with Section 59-1-1410; and
2146          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410, if
2147     the person files for the refund on or before June 30, 2011;
2148          (59) purchases:
2149          (a) of one or more of the following items in printed or electronic format:
2150          (i) a list containing information that includes one or more:
2151          (A) names; or
2152          (B) addresses; or
2153          (ii) a database containing information that includes one or more:
2154          (A) names; or
2155          (B) addresses; and
2156          (b) used to send direct mail;
2157          (60) redemptions or repurchases of a product by a person if that product was:

2158          (a) delivered to a pawnbroker as part of a pawn transaction; and
2159          (b) redeemed or repurchased within the time period established in a written agreement
2160     between the person and the pawnbroker for redeeming or repurchasing the product;
2161          (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
2162          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
2163     and
2164          (ii) has a useful economic life of one or more years; and
2165          (b) the following apply to Subsection (61)(a):
2166          (i) telecommunications enabling or facilitating equipment, machinery, or software;
2167          (ii) telecommunications equipment, machinery, or software required for 911 service;
2168          (iii) telecommunications maintenance or repair equipment, machinery, or software;
2169          (iv) telecommunications switching or routing equipment, machinery, or software; or
2170          (v) telecommunications transmission equipment, machinery, or software;
2171          (62) (a) beginning on July 1, 2006, and ending on June 30, 2027, purchases of tangible
2172     personal property or a product transferred electronically that are used in the research and
2173     development of alternative energy technology; and
2174          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
2175     commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
2176     purchases of tangible personal property or a product transferred electronically that are used in
2177     the research and development of alternative energy technology;
2178          (63) (a) purchases of tangible personal property or a product transferred electronically
2179     if:
2180          (i) the tangible personal property or product transferred electronically is:
2181          (A) purchased outside of this state;
2182          (B) brought into this state at any time after the purchase described in Subsection
2183     (63)(a)(i)(A); and
2184          (C) used in conducting business in this state; and
2185          (ii) for:

2186          (A) tangible personal property or a product transferred electronically other than the
2187     tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
2188     for a purpose for which the property is designed occurs outside of this state; or
2189          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
2190     outside of this state;
2191          (b) the exemption provided for in Subsection (63)(a) does not apply to:
2192          (i) a lease or rental of tangible personal property or a product transferred electronically;
2193     or
2194          (ii) a sale of a vehicle exempt under Subsection (33); and
2195          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
2196     purposes of Subsection (63)(a), the commission may by rule define what constitutes the
2197     following:
2198          (i) conducting business in this state if that phrase has the same meaning in this
2199     Subsection (63) as in Subsection (24);
2200          (ii) the first use of tangible personal property or a product transferred electronically if
2201     that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
2202          (iii) a purpose for which tangible personal property or a product transferred
2203     electronically is designed if that phrase has the same meaning in this Subsection (63) as in
2204     Subsection (24);
2205          (64) sales of disposable home medical equipment or supplies if:
2206          (a) a person presents a prescription for the disposable home medical equipment or
2207     supplies;
2208          (b) the disposable home medical equipment or supplies are used exclusively by the
2209     person to whom the prescription described in Subsection (64)(a) is issued; and
2210          (c) the disposable home medical equipment and supplies are listed as eligible for
2211     payment under:
2212          (i) Title XVIII, federal Social Security Act; or
2213          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;

2214          (65) sales:
2215          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
2216     District Act; or
2217          (b) of tangible personal property to a subcontractor of a public transit district, if the
2218     tangible personal property is:
2219          (i) clearly identified; and
2220          (ii) installed or converted to real property owned by the public transit district;
2221          (66) sales of construction materials:
2222          (a) purchased on or after July 1, 2010;
2223          (b) purchased by, on behalf of, or for the benefit of an international airport:
2224          (i) located within a county of the first class; and
2225          (ii) that has a United States customs office on its premises; and
2226          (c) if the construction materials are:
2227          (i) clearly identified;
2228          (ii) segregated; and
2229          (iii) installed or converted to real property:
2230          (A) owned or operated by the international airport described in Subsection (66)(b); and
2231          (B) located at the international airport described in Subsection (66)(b);
2232          (67) sales of construction materials:
2233          (a) purchased on or after July 1, 2008;
2234          (b) purchased by, on behalf of, or for the benefit of a new airport:
2235          (i) located within a county of the second class; and
2236          (ii) that is owned or operated by a city in which an airline as defined in Section
2237     59-2-102 is headquartered; and
2238          (c) if the construction materials are:
2239          (i) clearly identified;
2240          (ii) segregated; and
2241          (iii) installed or converted to real property:

2242          (A) owned or operated by the new airport described in Subsection (67)(b);
2243          (B) located at the new airport described in Subsection (67)(b); and
2244          (C) as part of the construction of the new airport described in Subsection (67)(b);
2245          (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
2246          (69) purchases and sales described in Section 63H-4-111;
2247          (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
2248     overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
2249     a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
2250     lists a state or country other than this state as the location of registry of the fixed wing turbine
2251     powered aircraft; or
2252          (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
2253     provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
2254     a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
2255     lists a state or country other than this state as the location of registry of the fixed wing turbine
2256     powered aircraft;
2257          (71) subject to Section 59-12-104.4, sales of a textbook for a higher education course:
2258          (a) to a person admitted to an institution of higher education; and
2259          (b) by a seller, other than a bookstore owned by an institution of higher education, if
2260     51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
2261     textbook for a higher education course;
2262          (72) a license fee or tax a municipality imposes in accordance with Subsection
2263     10-1-203(5) on a purchaser from a business for which the municipality provides an enhanced
2264     level of municipal services;
2265          (73) amounts paid or charged for construction materials used in the construction of a
2266     new or expanding life science research and development facility in the state, if the construction
2267     materials are:
2268          (a) clearly identified;
2269          (b) segregated; and

2270          (c) installed or converted to real property;
2271          (74) amounts paid or charged for:
2272          (a) a purchase or lease of machinery and equipment that:
2273          (i) are used in performing qualified research:
2274          (A) as defined in Section 59-7-612;
2275          (B) in the state; and
2276          (C) with respect to which the purchaser pays or incurs a qualified research expense as
2277     defined in Section 59-7-612; and
2278          (ii) have an economic life of three or more years; and
2279          (b) normal operating repair or replacement parts:
2280          (i) for the machinery and equipment described in Subsection (74)(a); and
2281          (ii) that have an economic life of three or more years;
2282          (75) a sale or lease of tangible personal property used in the preparation of prepared
2283     food if:
2284          (a) for a sale:
2285          (i) the ownership of the seller and the ownership of the purchaser are identical; and
2286          (ii) the seller or the purchaser paid a tax under this chapter on the purchase of that
2287     tangible personal property prior to making the sale; or
2288          (b) for a lease:
2289          (i) the ownership of the lessor and the ownership of the lessee are identical; and
2290          (ii) the lessor or the lessee paid a tax under this chapter on the purchase of that tangible
2291     personal property prior to making the lease;
2292          (76) (a) purchases of machinery or equipment if:
2293          (i) the purchaser is an establishment described in NAICS Subsector 713, Amusement,
2294     Gambling, and Recreation Industries, of the 2012 North American Industry Classification
2295     System of the federal Executive Office of the President, Office of Management and Budget;
2296          (ii) the machinery or equipment:
2297          (A) has an economic life of three or more years; and

2298          (B) is used by one or more persons who pay admission or user fees described in
2299     Subsection 59-12-103(1)(f) to the purchaser of the machinery and equipment; and
2300          (iii) 51% or more of the purchaser's sales revenue for the previous calendar quarter is:
2301          (A) amounts paid or charged as admission or user fees described in Subsection
2302     59-12-103(1)(f); and
2303          (B) subject to taxation under this chapter;
2304          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
2305     commission may make rules for verifying that 51% of a purchaser's sales revenue for the
2306     previous calendar quarter is:
2307          (i) amounts paid or charged as admission or user fees described in Subsection
2308     59-12-103(1)(f); and
2309          (ii) subject to taxation under this chapter; and
2310          (c) on or before the November 2018 interim meeting, and every five years after the
2311     November 2018 interim meeting, the commission shall review the exemption provided in this
2312     Subsection (76) and report to the Revenue and Taxation Interim Committee on:
2313          (i) the revenue lost to the state and local taxing jurisdictions as a result of the
2314     exemption;
2315          (ii) the purpose and effectiveness of the exemption; and
2316          (iii) whether the exemption benefits the state;
2317          (77) purchases of a short-term lodging consumable by a business that provides
2318     accommodations and services described in Subsection 59-12-103(1)(i);
2319          (78) amounts paid or charged to access a database:
2320          (a) if the primary purpose for accessing the database is to view or retrieve information
2321     from the database; and
2322          (b) not including amounts paid or charged for a:
2323          (i) digital audiowork;
2324          (ii) digital audio-visual work; or
2325          (iii) digital book;

2326          (79) amounts paid or charged for a purchase or lease made by an electronic financial
2327     payment service, of:
2328          (a) machinery and equipment that:
2329          (i) are used in the operation of the electronic financial payment service; and
2330          (ii) have an economic life of three or more years; and
2331          (b) normal operating repair or replacement parts that:
2332          (i) are used in the operation of the electronic financial payment service; and
2333          (ii) have an economic life of three or more years;
2334          (80) beginning on April 1, 2013, sales of a fuel cell as defined in Section 54-15-102;
2335          (81) amounts paid or charged for a purchase or lease of tangible personal property or a
2336     product transferred electronically if the tangible personal property or product transferred
2337     electronically:
2338          (a) is stored, used, or consumed in the state; and
2339          (b) is temporarily brought into the state from another state:
2340          (i) during a disaster period as defined in Section 53-2a-1202;
2341          (ii) by an out-of-state business as defined in Section 53-2a-1202;
2342          (iii) for a declared state disaster or emergency as defined in Section 53-2a-1202; and
2343          (iv) for disaster- or emergency-related work as defined in Section 53-2a-1202; [and]
2344          (82) sales of goods and services at a morale, welfare, and recreation facility, as defined
2345     in Section 39-9-102, made pursuant to Title 39, Chapter 9, State Morale, Welfare, and
2346     Recreation Program[.]; and
2347          (83) (a) except as provided in Subsection (83)(b), amounts paid or charged for a
2348     purchase or lease made by a drilling equipment manufacturer of machinery, equipment,
2349     materials, or normal operating repair or replacement parts:
2350          (i) that are used or consumed exclusively in the drilling equipment manufacturer's
2351     manufacturing process; and
2352          (ii) except for office:
2353          (A) equipment; or

2354          (B) supplies; and
2355          (b) beginning on July 1, 2015, and ending on June 30, 2017, a person may claim an
2356     exemption described in Subsection (83)(a) only by filing for a refund:
2357          (i) of 50% of the tax paid on the amounts paid or charged; and
2358          (ii) in accordance with Section 59-1-1410.
2359          Section 3. Effective date.
2360          This bill takes effect on July 1, 2015.