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7 LONG TITLE
8 General Description:
9 This bill amends a sales and use tax exemption.
10 Highlighted Provisions:
11 This bill:
12 ▸ repeals a provision related to the economic life of machinery, equipment, or normal
13 operating repair or replacement parts for purposes of a sales and use tax exemption
14 related to certain business activities;
15 ▸ amends the sales and use tax exemption to include certain materials;
16 ▸ provides that for a certain time period, the sales and use tax exemption for certain
17 materials may be claimed only by filing for a partial refund of the tax paid; and
18 ▸ makes technical and conforming changes.
19 Money Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 This bill provides a special effective date.
23 Utah Code Sections Affected:
24 AMENDS:
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 59-12-104 is amended to read:
29 59-12-104. Exemptions.
30 Exemptions from the taxes imposed by this chapter are as follows:
31 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
32 under Chapter 13, Motor and Special Fuel Tax Act;
33 (2) subject to Section 59-12-104.6, sales to the state, its institutions, and its political
34 subdivisions; however, this exemption does not apply to sales of:
35 (a) construction materials except:
36 (i) construction materials purchased by or on behalf of institutions of the public
37 education system as defined in Utah Constitution Article X, Section 2, provided the
38 construction materials are clearly identified and segregated and installed or converted to real
39 property which is owned by institutions of the public education system; and
40 (ii) construction materials purchased by the state, its institutions, or its political
41 subdivisions which are installed or converted to real property by employees of the state, its
42 institutions, or its political subdivisions; or
43 (b) tangible personal property in connection with the construction, operation,
44 maintenance, repair, or replacement of a project, as defined in Section 11-13-103, or facilities
45 providing additional project capacity, as defined in Section 11-13-103;
46 (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
47 (i) the proceeds of each sale do not exceed $1; and
48 (ii) the seller or operator of the vending machine reports an amount equal to 150% of
49 the cost of the item described in Subsection (3)(b) as goods consumed; and
50 (b) Subsection (3)(a) applies to:
51 (i) food and food ingredients; or
52 (ii) prepared food;
53 (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
54 (i) alcoholic beverages;
55 (ii) food and food ingredients; or
56 (iii) prepared food;
57 (b) sales of tangible personal property or a product transferred electronically:
58 (i) to a passenger;
59 (ii) by a commercial airline carrier; and
60 (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
61 (c) services related to Subsection (4)(a) or (b);
62 (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
63 and equipment:
64 (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
65 North American Industry Classification System of the federal Executive Office of the
66 President, Office of Management and Budget; and
67 (II) for:
68 (Aa) installation in an aircraft, including services relating to the installation of parts or
69 equipment in the aircraft;
70 (Bb) renovation of an aircraft; or
71 (Cc) repair of an aircraft; or
72 (B) for installation in an aircraft operated by a common carrier in interstate or foreign
73 commerce; or
74 (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
75 aircraft operated by a common carrier in interstate or foreign commerce; and
76 (b) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund,
77 a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
78 refund:
79 (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
80 (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
81 (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
82 the sale prior to filing for the refund;
83 (iv) for sales and use taxes paid under this chapter on the sale;
84 (v) in accordance with Section 59-1-1410; and
85 (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410, if
86 the person files for the refund on or before September 30, 2011;
87 (6) sales of commercials, motion picture films, prerecorded audio program tapes or
88 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
89 exhibitor, distributor, or commercial television or radio broadcaster;
90 (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
91 property if the cleaning or washing of the tangible personal property is not assisted cleaning or
92 washing of tangible personal property;
93 (b) if a seller that sells at the same business location assisted cleaning or washing of
94 tangible personal property and cleaning or washing of tangible personal property that is not
95 assisted cleaning or washing of tangible personal property, the exemption described in
96 Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
97 or washing of the tangible personal property; and
98 (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
99 Utah Administrative Rulemaking Act, the commission may make rules:
100 (i) governing the circumstances under which sales are at the same business location;
101 and
102 (ii) establishing the procedures and requirements for a seller to separately account for
103 sales of assisted cleaning or washing of tangible personal property;
104 (8) sales made to or by religious or charitable institutions in the conduct of their regular
105 religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
106 fulfilled;
107 (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
108 this state if the vehicle is:
109 (a) not registered in this state; and
110 (b) (i) not used in this state; or
111 (ii) used in this state:
112 (A) if the vehicle is not used to conduct business, for a time period that does not
113 exceed the longer of:
114 (I) 30 days in any calendar year; or
115 (II) the time period necessary to transport the vehicle to the borders of this state; or
116 (B) if the vehicle is used to conduct business, for the time period necessary to transport
117 the vehicle to the borders of this state;
118 (10) (a) amounts paid for an item described in Subsection (10)(b) if:
119 (i) the item is intended for human use; and
120 (ii) (A) a prescription was issued for the item; or
121 (B) the item was purchased by a hospital or other medical facility; and
122 (b) (i) Subsection (10)(a) applies to:
123 (A) a drug;
124 (B) a syringe; or
125 (C) a stoma supply; and
126 (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
127 commission may by rule define the terms:
128 (A) "syringe"; or
129 (B) "stoma supply";
130 (11) purchases or leases exempt under Section 19-12-201;
131 (12) (a) sales of an item described in Subsection (12)(c) served by:
132 (i) the following if the item described in Subsection (12)(c) is not available to the
133 general public:
134 (A) a church; or
135 (B) a charitable institution;
136 (ii) an institution of higher education if:
137 (A) the item described in Subsection (12)(c) is not available to the general public; or
138 (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
139 offered by the institution of higher education; or
140 (b) sales of an item described in Subsection (12)(c) provided for a patient by:
141 (i) a medical facility; or
142 (ii) a nursing facility; and
143 (c) Subsections (12)(a) and (b) apply to:
144 (i) food and food ingredients;
145 (ii) prepared food; or
146 (iii) alcoholic beverages;
147 (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
148 or a product transferred electronically by a person:
149 (i) regardless of the number of transactions involving the sale of that tangible personal
150 property or product transferred electronically by that person; and
151 (ii) not regularly engaged in the business of selling that type of tangible personal
152 property or product transferred electronically;
153 (b) this Subsection (13) does not apply if:
154 (i) the sale is one of a series of sales of a character to indicate that the person is
155 regularly engaged in the business of selling that type of tangible personal property or product
156 transferred electronically;
157 (ii) the person holds that person out as regularly engaged in the business of selling that
158 type of tangible personal property or product transferred electronically;
159 (iii) the person sells an item of tangible personal property or product transferred
160 electronically that the person purchased as a sale that is exempt under Subsection (25); or
161 (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
162 this state in which case the tax is based upon:
163 (A) the bill of sale or other written evidence of value of the vehicle or vessel being
164 sold; or
165 (B) in the absence of a bill of sale or other written evidence of value, the fair market
166 value of the vehicle or vessel being sold at the time of the sale as determined by the
167 commission; and
168 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
169 commission shall make rules establishing the circumstances under which:
170 (i) a person is regularly engaged in the business of selling a type of tangible personal
171 property or product transferred electronically;
172 (ii) a sale of tangible personal property or a product transferred electronically is one of
173 a series of sales of a character to indicate that a person is regularly engaged in the business of
174 selling that type of tangible personal property or product transferred electronically; or
175 (iii) a person holds that person out as regularly engaged in the business of selling a type
176 of tangible personal property or product transferred electronically;
177 (14) (a) except as provided in Subsection (14)(d), amounts paid or charged for a
178 purchase or lease:
179 (i) by a manufacturing facility located in the state; [
180 (ii) of machinery, equipment, or normal operating repair or replacement parts if the
181 machinery, equipment, or normal operating repair or replacement parts [
182
183 (A) in the manufacturing process to manufacture an item sold as tangible personal
184 property; or
185 (B) for a scrap recycler, to process an item sold as tangible personal property; and
186 (iii) of materials, except for office equipment or office supplies, if those materials are
187 used or consumed:
188 (A) in the manufacturing process to manufacture an item sold as tangible personal
189 property; and
190 (B) for a scrap recycler, to process an item sold as tangible personal property;
191 (b) except as provided in Subsection (14)(d), amounts paid or charged for a purchase or
192 lease:
193 (i) by an establishment:
194 (A) described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS Code
195 213113, Support Activities for Coal Mining, 213114, Support Activities for Metal Mining, or
196 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining, of the 2002 North
197 American Industry Classification System of the federal Executive Office of the President,
198 Office of Management and Budget; and
199 (B) located in the state; [
200 (ii) of machinery, equipment, or normal operating repair or replacement parts if the
201 machinery, equipment, or normal operating repair or replacement parts [
202
203 (A) the production process to produce an item sold as tangible personal property;
204 (B) research and development;
205 (C) transporting, storing, or managing tailings, overburden, or similar waste materials
206 produced from mining;
207 (D) developing or maintaining a road, tunnel, excavation, or similar feature used in
208 mining; or
209 (E) preventing, controlling, or reducing dust or other pollutants from mining; and
210 (iii) of materials, except for office equipment or office supplies, if those materials are
211 used or consumed in:
212 (A) the production process to produce an item sold as tangible personal property;
213 (B) research and development;
214 (C) transporting, storing, or managing tailings, overburden, or similar waste materials
215 produced from mining;
216 (D) developing or maintaining a road, tunnel, excavation, or similar feature used in
217 mining; or
218 (E) preventing, controlling, or reducing dust or other pollutants from mining;
219 (c) except as provided in Subsection (14)(d), amounts paid or charged for a purchase or
220 lease:
221 (i) by an establishment:
222 (A) described in NAICS Code 518112, Web Search Portals, of the 2002 North
223 American Industry Classification System of the federal Executive Office of the President,
224 Office of Management and Budget; and
225 (B) located in the state; [
226 (ii) of machinery, equipment, or normal operating repair or replacement parts if the
227 machinery, equipment, or normal operating repair or replacement parts[
228 operation of the web search portal; and
229 [
230 (iii) of materials, except for office equipment or office supplies, if those materials are
231 used or consumed in the operation of the web search portal;
232 (d) beginning on July 1, 2017, and ending on June 30, 2019, a person may claim an
233 exemption described in Subsection (14)(a)(iii), (14)(b)(iii), or (14)(c)(iii) only by filing for a
234 refund:
235 (i) (A) for amounts paid or charged on or after July 1, 2017, but on or before June 30,
236 2018, of 33% of the tax paid on the amounts paid or charged; or
237 (B) for amounts paid or charged on or after July 1, 2018, but on or before June 30,
238 2019, of 66% of the tax paid on the amounts paid or charged; and
239 (ii) in accordance with Section 59-1-1410;
240 [
241 3, Utah Administrative Rulemaking Act, the commission:
242 (i) shall by rule define the term "establishment"; and
243 (ii) may by rule define what constitutes:
244 (A) processing an item sold as tangible personal property;
245 (B) the production process, to produce an item sold as tangible personal property; or
246 (C) research and development; and
247 [
248 commission shall:
249 (i) review the exemptions described in this Subsection (14) and make
250 recommendations to the Revenue and Taxation Interim Committee concerning whether the
251 exemptions should be continued, modified, or repealed; and
252 (ii) include in its report:
253 (A) an estimate of the cost of the exemptions;
254 (B) the purpose and effectiveness of the exemptions; and
255 (C) the benefits of the exemptions to the state;
256 (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
257 (i) tooling;
258 (ii) special tooling;
259 (iii) support equipment;
260 (iv) special test equipment; or
261 (v) parts used in the repairs or renovations of tooling or equipment described in
262 Subsections (15)(a)(i) through (iv); and
263 (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
264 (i) the tooling, equipment, or parts are used or consumed exclusively in the
265 performance of any aerospace or electronics industry contract with the United States
266 government or any subcontract under that contract; and
267 (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
268 title to the tooling, equipment, or parts is vested in the United States government as evidenced
269 by:
270 (A) a government identification tag placed on the tooling, equipment, or parts; or
271 (B) listing on a government-approved property record if placing a government
272 identification tag on the tooling, equipment, or parts is impractical;
273 (16) sales of newspapers or newspaper subscriptions;
274 (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
275 product transferred electronically traded in as full or part payment of the purchase price, except
276 that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
277 trade-ins are limited to other vehicles only, and the tax is based upon:
278 (i) the bill of sale or other written evidence of value of the vehicle being sold and the
279 vehicle being traded in; or
280 (ii) in the absence of a bill of sale or other written evidence of value, the then existing
281 fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
282 commission; and
283 (b) Subsection (17)(a) does not apply to the following items of tangible personal
284 property or products transferred electronically traded in as full or part payment of the purchase
285 price:
286 (i) money;
287 (ii) electricity;
288 (iii) water;
289 (iv) gas; or
290 (v) steam;
291 (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
292 or a product transferred electronically used or consumed primarily and directly in farming
293 operations, regardless of whether the tangible personal property or product transferred
294 electronically:
295 (A) becomes part of real estate; or
296 (B) is installed by a:
297 (I) farmer;
298 (II) contractor; or
299 (III) subcontractor; or
300 (ii) sales of parts used in the repairs or renovations of tangible personal property or a
301 product transferred electronically if the tangible personal property or product transferred
302 electronically is exempt under Subsection (18)(a)(i); and
303 (b) amounts paid or charged for the following are subject to the taxes imposed by this
304 chapter:
305 (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
306 incidental to farming:
307 (I) machinery;
308 (II) equipment;
309 (III) materials; or
310 (IV) supplies; and
311 (B) tangible personal property that is considered to be used in a manner that is
312 incidental to farming includes:
313 (I) hand tools; or
314 (II) maintenance and janitorial equipment and supplies;
315 (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
316 transferred electronically if the tangible personal property or product transferred electronically
317 is used in an activity other than farming; and
318 (B) tangible personal property or a product transferred electronically that is considered
319 to be used in an activity other than farming includes:
320 (I) office equipment and supplies; or
321 (II) equipment and supplies used in:
322 (Aa) the sale or distribution of farm products;
323 (Bb) research; or
324 (Cc) transportation; or
325 (iii) a vehicle required to be registered by the laws of this state during the period
326 ending two years after the date of the vehicle's purchase;
327 (19) sales of hay;
328 (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
329 garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
330 garden, farm, or other agricultural produce is sold by:
331 (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
332 agricultural produce;
333 (b) an employee of the producer described in Subsection (20)(a); or
334 (c) a member of the immediate family of the producer described in Subsection (20)(a);
335 (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
336 under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
337 (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
338 nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
339 wholesaler, or retailer for use in packaging tangible personal property to be sold by that
340 manufacturer, processor, wholesaler, or retailer;
341 (23) a product stored in the state for resale;
342 (24) (a) purchases of a product if:
343 (i) the product is:
344 (A) purchased outside of this state;
345 (B) brought into this state:
346 (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
347 (II) by a nonresident person who is not living or working in this state at the time of the
348 purchase;
349 (C) used for the personal use or enjoyment of the nonresident person described in
350 Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
351 (D) not used in conducting business in this state; and
352 (ii) for:
353 (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
354 the product for a purpose for which the product is designed occurs outside of this state;
355 (B) a boat, the boat is registered outside of this state; or
356 (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
357 outside of this state;
358 (b) the exemption provided for in Subsection (24)(a) does not apply to:
359 (i) a lease or rental of a product; or
360 (ii) a sale of a vehicle exempt under Subsection (33); and
361 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
362 purposes of Subsection (24)(a), the commission may by rule define what constitutes the
363 following:
364 (i) conducting business in this state if that phrase has the same meaning in this
365 Subsection (24) as in Subsection (63);
366 (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
367 as in Subsection (63); or
368 (iii) a purpose for which a product is designed if that phrase has the same meaning in
369 this Subsection (24) as in Subsection (63);
370 (25) a product purchased for resale in this state, in the regular course of business, either
371 in its original form or as an ingredient or component part of a manufactured or compounded
372 product;
373 (26) a product upon which a sales or use tax was paid to some other state, or one of its
374 subdivisions, except that the state shall be paid any difference between the tax paid and the tax
375 imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
376 the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
377 Act;
378 (27) any sale of a service described in Subsections 59-12-103(1)(b), (c), and (d) to a
379 person for use in compounding a service taxable under the subsections;
380 (28) purchases made in accordance with the special supplemental nutrition program for
381 women, infants, and children established in 42 U.S.C. Sec. 1786;
382 (29) sales or leases of rolls, rollers, refractory brick, electric motors, or other
383 replacement parts used in the furnaces, mills, or ovens of a steel mill described in SIC Code
384 3312 of the 1987 Standard Industrial Classification Manual of the federal Executive Office of
385 the President, Office of Management and Budget;
386 (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
387 Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
388 (a) not registered in this state; and
389 (b) (i) not used in this state; or
390 (ii) used in this state:
391 (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
392 time period that does not exceed the longer of:
393 (I) 30 days in any calendar year; or
394 (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
395 the borders of this state; or
396 (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
397 period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
398 state;
399 (31) sales of aircraft manufactured in Utah;
400 (32) amounts paid for the purchase of telecommunications service for purposes of
401 providing telecommunications service;
402 (33) sales, leases, or uses of the following:
403 (a) a vehicle by an authorized carrier; or
404 (b) tangible personal property that is installed on a vehicle:
405 (i) sold or leased to or used by an authorized carrier; and
406 (ii) before the vehicle is placed in service for the first time;
407 (34) (a) 45% of the sales price of any new manufactured home; and
408 (b) 100% of the sales price of any used manufactured home;
409 (35) sales relating to schools and fundraising sales;
410 (36) sales or rentals of durable medical equipment if:
411 (a) a person presents a prescription for the durable medical equipment; and
412 (b) the durable medical equipment is used for home use only;
413 (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
414 Section 72-11-102; and
415 (b) the commission shall by rule determine the method for calculating sales exempt
416 under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
417 (38) sales to a ski resort of:
418 (a) snowmaking equipment;
419 (b) ski slope grooming equipment;
420 (c) passenger ropeways as defined in Section 72-11-102; or
421 (d) parts used in the repairs or renovations of equipment or passenger ropeways
422 described in Subsections (38)(a) through (c);
423 (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
424 (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
425 amusement, entertainment, or recreation an unassisted amusement device as defined in Section
426 59-12-102;
427 (b) if a seller that sells or rents at the same business location the right to use or operate
428 for amusement, entertainment, or recreation one or more unassisted amusement devices and
429 one or more assisted amusement devices, the exemption described in Subsection (40)(a)
430 applies if the seller separately accounts for the sales or rentals of the right to use or operate for
431 amusement, entertainment, or recreation for the assisted amusement devices; and
432 (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
433 Utah Administrative Rulemaking Act, the commission may make rules:
434 (i) governing the circumstances under which sales are at the same business location;
435 and
436 (ii) establishing the procedures and requirements for a seller to separately account for
437 the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
438 assisted amusement devices;
439 (41) (a) sales of photocopies by:
440 (i) a governmental entity; or
441 (ii) an entity within the state system of public education, including:
442 (A) a school; or
443 (B) the State Board of Education; or
444 (b) sales of publications by a governmental entity;
445 (42) amounts paid for admission to an athletic event at an institution of higher
446 education that is subject to the provisions of Title IX of the Education Amendments of 1972,
447 20 U.S.C. Sec. 1681 et seq.;
448 (43) (a) sales made to or by:
449 (i) an area agency on aging; or
450 (ii) a senior citizen center owned by a county, city, or town; or
451 (b) sales made by a senior citizen center that contracts with an area agency on aging;
452 (44) sales or leases of semiconductor fabricating, processing, research, or development
453 materials regardless of whether the semiconductor fabricating, processing, research, or
454 development materials:
455 (a) actually come into contact with a semiconductor; or
456 (b) ultimately become incorporated into real property;
457 (45) an amount paid by or charged to a purchaser for accommodations and services
458 described in Subsection 59-12-103(1)(i) to the extent the amount is exempt under Section
459 59-12-104.2;
460 (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
461 sports event registration certificate in accordance with Section 41-3-306 for the event period
462 specified on the temporary sports event registration certificate;
463 (47) (a) sales or uses of electricity, if the sales or uses are made under a tariff adopted
464 by the Public Service Commission of Utah only for purchase of electricity produced from a
465 new alternative energy source, as designated in the tariff by the Public Service Commission of
466 Utah; and
467 (b) the exemption under Subsection (47)(a) applies to the portion of the tariff rate a
468 customer pays under the tariff described in Subsection (47)(a) that exceeds the tariff rate under
469 the tariff described in Subsection (47)(a) that the customer would have paid absent the tariff;
470 (48) sales or rentals of mobility enhancing equipment if a person presents a
471 prescription for the mobility enhancing equipment;
472 (49) sales of water in a:
473 (a) pipe;
474 (b) conduit;
475 (c) ditch; or
476 (d) reservoir;
477 (50) sales of currency or coins that constitute legal tender of a state, the United States,
478 or a foreign nation;
479 (51) (a) sales of an item described in Subsection (51)(b) if the item:
480 (i) does not constitute legal tender of a state, the United States, or a foreign nation; and
481 (ii) has a gold, silver, or platinum content of 50% or more; and
482 (b) Subsection (51)(a) applies to a gold, silver, or platinum:
483 (i) ingot;
484 (ii) bar;
485 (iii) medallion; or
486 (iv) decorative coin;
487 (52) amounts paid on a sale-leaseback transaction;
488 (53) sales of a prosthetic device:
489 (a) for use on or in a human; and
490 (b) (i) for which a prescription is required; or
491 (ii) if the prosthetic device is purchased by a hospital or other medical facility;
492 (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
493 machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
494 or equipment is primarily used in the production or postproduction of the following media for
495 commercial distribution:
496 (i) a motion picture;
497 (ii) a television program;
498 (iii) a movie made for television;
499 (iv) a music video;
500 (v) a commercial;
501 (vi) a documentary; or
502 (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
503 commission by administrative rule made in accordance with Subsection (54)(d); or
504 (b) purchases, leases, or rentals of machinery or equipment by an establishment
505 described in Subsection (54)(c) that is used for the production or postproduction of the
506 following are subject to the taxes imposed by this chapter:
507 (i) a live musical performance;
508 (ii) a live news program; or
509 (iii) a live sporting event;
510 (c) the following establishments listed in the 1997 North American Industry
511 Classification System of the federal Executive Office of the President, Office of Management
512 and Budget, apply to Subsections (54)(a) and (b):
513 (i) NAICS Code 512110; or
514 (ii) NAICS Code 51219; and
515 (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
516 commission may by rule:
517 (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
518 or
519 (ii) define:
520 (A) "commercial distribution";
521 (B) "live musical performance";
522 (C) "live news program"; or
523 (D) "live sporting event";
524 (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
525 on or before June 30, 2027, of tangible personal property that:
526 (i) is leased or purchased for or by a facility that:
527 (A) is an alternative energy electricity production facility;
528 (B) is located in the state; and
529 (C) (I) becomes operational on or after July 1, 2004; or
530 (II) has its generation capacity increased by one or more megawatts on or after July 1,
531 2004, as a result of the use of the tangible personal property;
532 (ii) has an economic life of five or more years; and
533 (iii) is used to make the facility or the increase in capacity of the facility described in
534 Subsection (55)(a)(i) operational up to the point of interconnection with an existing
535 transmission grid including:
536 (A) a wind turbine;
537 (B) generating equipment;
538 (C) a control and monitoring system;
539 (D) a power line;
540 (E) substation equipment;
541 (F) lighting;
542 (G) fencing;
543 (H) pipes; or
544 (I) other equipment used for locating a power line or pole; and
545 (b) this Subsection (55) does not apply to:
546 (i) tangible personal property used in construction of:
547 (A) a new alternative energy electricity production facility; or
548 (B) the increase in the capacity of an alternative energy electricity production facility;
549 (ii) contracted services required for construction and routine maintenance activities;
550 and
551 (iii) unless the tangible personal property is used or acquired for an increase in capacity
552 of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal property used or
553 acquired after:
554 (A) the alternative energy electricity production facility described in Subsection
555 (55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
556 (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
557 in Subsection (55)(a)(iii);
558 (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
559 on or before June 30, 2027, of tangible personal property that:
560 (i) is leased or purchased for or by a facility that:
561 (A) is a waste energy production facility;
562 (B) is located in the state; and
563 (C) (I) becomes operational on or after July 1, 2004; or
564 (II) has its generation capacity increased by one or more megawatts on or after July 1,
565 2004, as a result of the use of the tangible personal property;
566 (ii) has an economic life of five or more years; and
567 (iii) is used to make the facility or the increase in capacity of the facility described in
568 Subsection (56)(a)(i) operational up to the point of interconnection with an existing
569 transmission grid including:
570 (A) generating equipment;
571 (B) a control and monitoring system;
572 (C) a power line;
573 (D) substation equipment;
574 (E) lighting;
575 (F) fencing;
576 (G) pipes; or
577 (H) other equipment used for locating a power line or pole; and
578 (b) this Subsection (56) does not apply to:
579 (i) tangible personal property used in construction of:
580 (A) a new waste energy facility; or
581 (B) the increase in the capacity of a waste energy facility;
582 (ii) contracted services required for construction and routine maintenance activities;
583 and
584 (iii) unless the tangible personal property is used or acquired for an increase in capacity
585 described in Subsection (56)(a)(i)(C)(II), tangible personal property used or acquired after:
586 (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
587 described in Subsection (56)(a)(iii); or
588 (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
589 in Subsection (56)(a)(iii);
590 (57) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
591 or before June 30, 2027, of tangible personal property that:
592 (i) is leased or purchased for or by a facility that:
593 (A) is located in the state;
594 (B) produces fuel from alternative energy, including:
595 (I) methanol; or
596 (II) ethanol; and
597 (C) (I) becomes operational on or after July 1, 2004; or
598 (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
599 a result of the installation of the tangible personal property;
600 (ii) has an economic life of five or more years; and
601 (iii) is installed on the facility described in Subsection (57)(a)(i);
602 (b) this Subsection (57) does not apply to:
603 (i) tangible personal property used in construction of:
604 (A) a new facility described in Subsection (57)(a)(i); or
605 (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
606 (ii) contracted services required for construction and routine maintenance activities;
607 and
608 (iii) unless the tangible personal property is used or acquired for an increase in capacity
609 described in Subsection (57)(a)(i)(C)(II), tangible personal property used or acquired after:
610 (A) the facility described in Subsection (57)(a)(i) is operational; or
611 (B) the increased capacity described in Subsection (57)(a)(i) is operational;
612 (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
613 product transferred electronically to a person within this state if that tangible personal property
614 or product transferred electronically is subsequently shipped outside the state and incorporated
615 pursuant to contract into and becomes a part of real property located outside of this state;
616 (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
617 state or political entity to which the tangible personal property is shipped imposes a sales, use,
618 gross receipts, or other similar transaction excise tax on the transaction against which the other
619 state or political entity allows a credit for sales and use taxes imposed by this chapter; and
620 (c) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund,
621 a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
622 refund:
623 (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
624 (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
625 which the sale is made;
626 (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
627 sale prior to filing for the refund;
628 (iv) for sales and use taxes paid under this chapter on the sale;
629 (v) in accordance with Section 59-1-1410; and
630 (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410, if
631 the person files for the refund on or before June 30, 2011;
632 (59) purchases:
633 (a) of one or more of the following items in printed or electronic format:
634 (i) a list containing information that includes one or more:
635 (A) names; or
636 (B) addresses; or
637 (ii) a database containing information that includes one or more:
638 (A) names; or
639 (B) addresses; and
640 (b) used to send direct mail;
641 (60) redemptions or repurchases of a product by a person if that product was:
642 (a) delivered to a pawnbroker as part of a pawn transaction; and
643 (b) redeemed or repurchased within the time period established in a written agreement
644 between the person and the pawnbroker for redeeming or repurchasing the product;
645 (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
646 (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
647 and
648 (ii) has a useful economic life of one or more years; and
649 (b) the following apply to Subsection (61)(a):
650 (i) telecommunications enabling or facilitating equipment, machinery, or software;
651 (ii) telecommunications equipment, machinery, or software required for 911 service;
652 (iii) telecommunications maintenance or repair equipment, machinery, or software;
653 (iv) telecommunications switching or routing equipment, machinery, or software; or
654 (v) telecommunications transmission equipment, machinery, or software;
655 (62) (a) beginning on July 1, 2006, and ending on June 30, 2027, purchases of tangible
656 personal property or a product transferred electronically that are used in the research and
657 development of alternative energy technology; and
658 (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
659 commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
660 purchases of tangible personal property or a product transferred electronically that are used in
661 the research and development of alternative energy technology;
662 (63) (a) purchases of tangible personal property or a product transferred electronically
663 if:
664 (i) the tangible personal property or product transferred electronically is:
665 (A) purchased outside of this state;
666 (B) brought into this state at any time after the purchase described in Subsection
667 (63)(a)(i)(A); and
668 (C) used in conducting business in this state; and
669 (ii) for:
670 (A) tangible personal property or a product transferred electronically other than the
671 tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
672 for a purpose for which the property is designed occurs outside of this state; or
673 (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
674 outside of this state;
675 (b) the exemption provided for in Subsection (63)(a) does not apply to:
676 (i) a lease or rental of tangible personal property or a product transferred electronically;
677 or
678 (ii) a sale of a vehicle exempt under Subsection (33); and
679 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
680 purposes of Subsection (63)(a), the commission may by rule define what constitutes the
681 following:
682 (i) conducting business in this state if that phrase has the same meaning in this
683 Subsection (63) as in Subsection (24);
684 (ii) the first use of tangible personal property or a product transferred electronically if
685 that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
686 (iii) a purpose for which tangible personal property or a product transferred
687 electronically is designed if that phrase has the same meaning in this Subsection (63) as in
688 Subsection (24);
689 (64) sales of disposable home medical equipment or supplies if:
690 (a) a person presents a prescription for the disposable home medical equipment or
691 supplies;
692 (b) the disposable home medical equipment or supplies are used exclusively by the
693 person to whom the prescription described in Subsection (64)(a) is issued; and
694 (c) the disposable home medical equipment and supplies are listed as eligible for
695 payment under:
696 (i) Title XVIII, federal Social Security Act; or
697 (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
698 (65) sales:
699 (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
700 District Act; or
701 (b) of tangible personal property to a subcontractor of a public transit district, if the
702 tangible personal property is:
703 (i) clearly identified; and
704 (ii) installed or converted to real property owned by the public transit district;
705 (66) sales of construction materials:
706 (a) purchased on or after July 1, 2010;
707 (b) purchased by, on behalf of, or for the benefit of an international airport:
708 (i) located within a county of the first class; and
709 (ii) that has a United States customs office on its premises; and
710 (c) if the construction materials are:
711 (i) clearly identified;
712 (ii) segregated; and
713 (iii) installed or converted to real property:
714 (A) owned or operated by the international airport described in Subsection (66)(b); and
715 (B) located at the international airport described in Subsection (66)(b);
716 (67) sales of construction materials:
717 (a) purchased on or after July 1, 2008;
718 (b) purchased by, on behalf of, or for the benefit of a new airport:
719 (i) located within a county of the second class; and
720 (ii) that is owned or operated by a city in which an airline as defined in Section
721 59-2-102 is headquartered; and
722 (c) if the construction materials are:
723 (i) clearly identified;
724 (ii) segregated; and
725 (iii) installed or converted to real property:
726 (A) owned or operated by the new airport described in Subsection (67)(b);
727 (B) located at the new airport described in Subsection (67)(b); and
728 (C) as part of the construction of the new airport described in Subsection (67)(b);
729 (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
730 (69) purchases and sales described in Section 63H-4-111;
731 (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
732 overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
733 a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
734 lists a state or country other than this state as the location of registry of the fixed wing turbine
735 powered aircraft; or
736 (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
737 provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
738 a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
739 lists a state or country other than this state as the location of registry of the fixed wing turbine
740 powered aircraft;
741 (71) subject to Section 59-12-104.4, sales of a textbook for a higher education course:
742 (a) to a person admitted to an institution of higher education; and
743 (b) by a seller, other than a bookstore owned by an institution of higher education, if
744 51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
745 textbook for a higher education course;
746 (72) a license fee or tax a municipality imposes in accordance with Subsection
747 10-1-203(5) on a purchaser from a business for which the municipality provides an enhanced
748 level of municipal services;
749 (73) amounts paid or charged for construction materials used in the construction of a
750 new or expanding life science research and development facility in the state, if the construction
751 materials are:
752 (a) clearly identified;
753 (b) segregated; and
754 (c) installed or converted to real property;
755 (74) amounts paid or charged for:
756 (a) a purchase or lease of machinery and equipment that:
757 (i) are used in performing qualified research:
758 (A) as defined in Section 59-7-612;
759 (B) in the state; and
760 (C) with respect to which the purchaser pays or incurs a qualified research expense as
761 defined in Section 59-7-612; and
762 (ii) have an economic life of three or more years; and
763 (b) normal operating repair or replacement parts:
764 (i) for the machinery and equipment described in Subsection (74)(a); and
765 (ii) that have an economic life of three or more years;
766 (75) a sale or lease of tangible personal property used in the preparation of prepared
767 food if:
768 (a) for a sale:
769 (i) the ownership of the seller and the ownership of the purchaser are identical; and
770 (ii) the seller or the purchaser paid a tax under this chapter on the purchase of that
771 tangible personal property prior to making the sale; or
772 (b) for a lease:
773 (i) the ownership of the lessor and the ownership of the lessee are identical; and
774 (ii) the lessor or the lessee paid a tax under this chapter on the purchase of that tangible
775 personal property prior to making the lease;
776 (76) (a) purchases of machinery or equipment if:
777 (i) the purchaser is an establishment described in NAICS Subsector 713, Amusement,
778 Gambling, and Recreation Industries, of the 2012 North American Industry Classification
779 System of the federal Executive Office of the President, Office of Management and Budget;
780 (ii) the machinery or equipment:
781 (A) has an economic life of three or more years; and
782 (B) is used by one or more persons who pay admission or user fees described in
783 Subsection 59-12-103(1)(f) to the purchaser of the machinery and equipment; and
784 (iii) 51% or more of the purchaser's sales revenue for the previous calendar quarter is:
785 (A) amounts paid or charged as admission or user fees described in Subsection
786 59-12-103(1)(f); and
787 (B) subject to taxation under this chapter;
788 (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
789 commission may make rules for verifying that 51% of a purchaser's sales revenue for the
790 previous calendar quarter is:
791 (i) amounts paid or charged as admission or user fees described in Subsection
792 59-12-103(1)(f); and
793 (ii) subject to taxation under this chapter; and
794 (c) on or before the November 2018 interim meeting, and every five years after the
795 November 2018 interim meeting, the commission shall review the exemption provided in this
796 Subsection (76) and report to the Revenue and Taxation Interim Committee on:
797 (i) the revenue lost to the state and local taxing jurisdictions as a result of the
798 exemption;
799 (ii) the purpose and effectiveness of the exemption; and
800 (iii) whether the exemption benefits the state;
801 (77) purchases of a short-term lodging consumable by a business that provides
802 accommodations and services described in Subsection 59-12-103(1)(i);
803 (78) amounts paid or charged to access a database:
804 (a) if the primary purpose for accessing the database is to view or retrieve information
805 from the database; and
806 (b) not including amounts paid or charged for a:
807 (i) digital audiowork;
808 (ii) digital audio-visual work; or
809 (iii) digital book;
810 (79) amounts paid or charged for a purchase or lease made by an electronic financial
811 payment service, of:
812 (a) machinery and equipment that:
813 (i) are used in the operation of the electronic financial payment service; and
814 (ii) have an economic life of three or more years; and
815 (b) normal operating repair or replacement parts that:
816 (i) are used in the operation of the electronic financial payment service; and
817 (ii) have an economic life of three or more years;
818 (80) beginning on April 1, 2013, sales of a fuel cell as defined in Section 54-15-102;
819 (81) amounts paid or charged for a purchase or lease of tangible personal property or a
820 product transferred electronically if the tangible personal property or product transferred
821 electronically:
822 (a) is stored, used, or consumed in the state; and
823 (b) is temporarily brought into the state from another state:
824 (i) during a disaster period as defined in Section 53-2a-1202;
825 (ii) by an out-of-state business as defined in Section 53-2a-1202;
826 (iii) for a declared state disaster or emergency as defined in Section 53-2a-1202; and
827 (iv) for disaster- or emergency-related work as defined in Section 53-2a-1202; and
828 (82) sales of goods and services at a morale, welfare, and recreation facility, as defined
829 in Section 39-9-102, made pursuant to Title 39, Chapter 9, State Morale, Welfare, and
830 Recreation Program.
831 Section 2. Effective date.
832 This bill takes effect on July 1, 2017.