Representative Mike K. McKell proposes the following substitute bill:


1     
REMOTE TRANSACTIONS PARITY ACT

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Mike K. McKell

5     
Senate Sponsor: Curtis S. Bramble

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to sales and use taxes.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     addresses the state sales and use tax rates;
14          ▸     addresses the circumstances under which a person may be required to collect and
15     remit sales and use taxes to the State Tax Commission;
16          ▸     makes technical and conforming changes; and
17          ▸     contains a severability provision.
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          59-1-401, as last amended by Laws of Utah 2015, Chapter 369
25          59-12-103, as last amended by Laws of Utah 2015, Chapter 283

26          59-12-103.1, as last amended by Laws of Utah 2013, Chapter 150
27          59-12-107, as last amended by Laws of Utah 2012, Chapters 178, 312, and 399
28          59-12-108, as last amended by Laws of Utah 2013, Chapter 50
29          59-12-211, as last amended by Laws of Utah 2012, Chapter 312
30          59-12-211.1, as last amended by Laws of Utah 2012, Chapter 312
31          76-8-1101, as last amended by Laws of Utah 2014, Chapter 52
32     ENACTS:
33          59-12-103.3, Utah Code Annotated 1953
34     

35     Be it enacted by the Legislature of the state of Utah:
36          Section 1. Section 59-1-401 is amended to read:
37          59-1-401. Definitions -- Offenses and penalties -- Rulemaking authority -- Statute
38     of limitations -- Commission authority to waive, reduce, or compromise penalty or
39     interest.
40          (1) As used in this section:
41          [(a) "Activated tax, fee, or charge" means a tax, fee, or charge with respect to which the
42     commission:]
43          [(i) has implemented the commission's GenTax system; and]
44          [(ii) at least 30 days before implementing the commission's GenTax system as
45     described in Subsection (1)(a)(i), has provided notice in a conspicuous place on the
46     commission's website stating:]
47          [(A) the date the commission will implement the GenTax system with respect to the
48     tax, fee, or charge; and]
49          [(B) that, at the time the commission implements the GenTax system with respect to
50     the tax, fee, or charge:]
51          [(I) a person that files a return after the due date as described in Subsection (2)(a) is
52     subject to the penalty described in Subsection (2)(c)(ii); and]
53          [(II) a person that fails to pay the tax, fee, or charge as described in Subsection (3)(a) is
54     subject to the penalty described in Subsection (3)(b)(ii).]
55          [(b) "Activation date for a tax, fee, or charge" means with respect to a tax, fee, or
56     charge, the later of:]

57          [(i) the date on which the commission implements the commission's GenTax system
58     with respect to the tax, fee, or charge; or]
59          [(ii) 30 days after the date the commission provides the notice described in Subsection
60     (1)(a)(ii) with respect to the tax, fee, or charge.]
61          [(c) (i)] (a) Except as provided in Subsection (1)[(c)(ii)](b), "tax, fee, or charge"
62     means:
63          [(A)] (i) a tax, fee, or charge the commission administers under:
64          [(I)] (A) this title;
65          [(II)] (B) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
66          [(III)] (C) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
67          [(IV)] (D) Section 19-6-410.5;
68          [(V)] (E) Section 19-6-714;
69          [(VI)] (F) Section 19-6-805;
70          [(VII)] (G) Section 32B-2-304;
71          [(VIII)] (H) Section 34A-2-202;
72          [(IX)] (I) Section 40-6-14;
73          [(X)] (J) Section 69-2-5;
74          [(XI)] (K) Section 69-2-5.5; or
75          [(XII)] (L) Section 69-2-5.6; or
76          [(B)] (ii) another amount that by statute is subject to a penalty imposed under this
77     section.
78          [(ii)] (b) "Tax, fee, or charge" does not include a tax, fee, or charge imposed under:
79          [(A)] (i) Title 41, Chapter 1a, Motor Vehicle Act, except for Section 41-1a-301;
80          [(B)] (ii) Title 41, Chapter 3, Motor Vehicle Business Regulation Act;
81          [(C)] (iii) Chapter 2, Property Tax Act, except for Section 59-2-1309;
82          [(D)] (iv) Chapter 3, Tax Equivalent Property Act; or
83          [(E)] (v) Chapter 4, Privilege Tax.
84          [(d) "Unactivated tax, fee, or charge" means a tax, fee, or charge except for an
85     activated tax, fee, or charge.]
86          (2) (a) The due date for filing a return is:
87          (i) if the person filing the return is not allowed by law an extension of time for filing

88     the return, the day on which the return is due as provided by law; or
89          (ii) if the person filing the return is allowed by law an extension of time for filing the
90     return, the earlier of:
91          (A) the date the person files the return; or
92          (B) the last day of that extension of time as allowed by law.
93          (b) A penalty in the amount described in Subsection (2)(c) is imposed if a person files a
94     return after the due date described in Subsection (2)(a).
95          (c) For purposes of Subsection (2)(b), the penalty is an amount equal to the greater of:
96          [(i) if the return described in Subsection (2)(b) is filed with respect to an unactivated
97     tax, fee, or charge:]
98          [(A) $20; or]
99          [(B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or]
100          [(ii) if the return described in Subsection (2)(b) is filed with respect to an activated tax,
101     fee, or charge, beginning on the activation date for the tax, fee, or charge:]
102          [(A)] (i) $20; or
103          [(B) (I)] (ii) (A) 2% of the unpaid [activated] tax, fee, or charge due on the return if the
104     return is filed no later than five days after the due date described in Subsection (2)(a);
105          [(II)] (B) 5% of the unpaid [activated] tax, fee, or charge due on the return if the return
106     is filed more than five days after the due date but no later than 15 days after the due date
107     described in Subsection (2)(a); or
108          [(III)] (C) 10% of the unpaid [activated] tax, fee, or charge due on the return if the
109     return is filed more than 15 days after the due date described in Subsection (2)(a).
110          (d) This Subsection (2) does not apply to:
111          (i) an amended return; or
112          (ii) a return with no tax due.
113          (3) (a) A person is subject to a penalty for failure to pay a tax, fee, or charge if:
114          (i) the person files a return on or before the due date for filing a return described in
115     Subsection (2)(a), but fails to pay the tax, fee, or charge due on the return on or before that due
116     date;
117          (ii) the person:
118          (A) is subject to a penalty under Subsection (2)(b); and

119          (B) fails to pay the tax, fee, or charge due on a return within a 90-day period after the
120     due date for filing a return described in Subsection (2)(a);
121          (iii) (A) the person is subject to a penalty under Subsection (2)(b); and
122          (B) the commission estimates an amount of tax due for that person in accordance with
123     Subsection 59-1-1406(2);
124          (iv) the person:
125          (A) is mailed a notice of deficiency; and
126          (B) within a 30-day period after the day on which the notice of deficiency described in
127     Subsection (3)(a)(iv)(A) is mailed:
128          (I) does not file a petition for redetermination or a request for agency action; and
129          (II) fails to pay the tax, fee, or charge due on a return;
130          (v) (A) the commission:
131          (I) issues an order constituting final agency action resulting from a timely filed petition
132     for redetermination or a timely filed request for agency action; or
133          (II) is considered to have denied a request for reconsideration under Subsection
134     63G-4-302(3)(b) resulting from a timely filed petition for redetermination or a timely filed
135     request for agency action; and
136          (B) the person fails to pay the tax, fee, or charge due on a return within a 30-day period
137     after the date the commission:
138          (I) issues the order constituting final agency action described in Subsection
139     (3)(a)(v)(A)(I); or
140          (II) is considered to have denied the request for reconsideration described in
141     Subsection (3)(a)(v)(A)(II); or
142          (vi) the person fails to pay the tax, fee, or charge within a 30-day period after the date
143     of a final judicial decision resulting from a timely filed petition for judicial review.
144          (b) For purposes of Subsection (3)(a), the penalty is an amount equal to the greater of:
145          [(i) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
146     respect to an unactivated tax, fee, or charge:]
147          [(A) $20; or]
148          [(B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or]
149          [(ii) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with

150     respect to an activated tax, fee, or charge, beginning on the activation date:]
151          [(A)] (i) $20; or
152          [(B) (I)] (ii) (A) 2% of the unpaid [activated] tax, fee, or charge due on the return if the
153     activated tax, fee, or charge due on the return is paid no later than five days after the due date
154     for filing a return described in Subsection (2)(a);
155          [(II)] (B) 5% of the unpaid [activated] tax, fee, or charge due on the return if the
156     activated tax, fee, or charge due on the return is paid more than five days after the due date for
157     filing a return described in Subsection (2)(a) but no later than 15 days after that due date; or
158          [(III)] (C) 10% of the unpaid [activated] tax, fee, or charge due on the return if the
159     activated tax, fee, or charge due on the return is paid more than 15 days after the due date for
160     filing a return described in Subsection (2)(a).
161          (4) (a) Beginning January 1, 1995, in the case of any underpayment of estimated tax or
162     quarterly installments required by Sections 59-5-107, 59-5-207, 59-7-504, and 59-9-104, there
163     shall be added a penalty in an amount determined by applying the interest rate provided under
164     Section 59-1-402 plus four percentage points to the amount of the underpayment for the period
165     of the underpayment.
166          (b) (i) For purposes of Subsection (4)(a), the amount of the underpayment shall be the
167     excess of the required installment over the amount, if any, of the installment paid on or before
168     the due date for the installment.
169          (ii) The period of the underpayment shall run from the due date for the installment to
170     whichever of the following dates is the earlier:
171          (A) the original due date of the tax return, without extensions, for the taxable year; or
172          (B) with respect to any portion of the underpayment, the date on which that portion is
173     paid.
174          (iii) For purposes of this Subsection (4), a payment of estimated tax shall be credited
175     against unpaid required installments in the order in which the installments are required to be
176     paid.
177          (5) (a) Notwithstanding Subsection (2) and except as provided in Subsection (6), a
178     person allowed by law an extension of time for filing a corporate franchise or income tax return
179     under Chapter 7, Corporate Franchise and Income Taxes, or an individual income tax return
180     under Chapter 10, Individual Income Tax Act, is subject to a penalty in the amount described in

181     Subsection (5)(b) if, on or before the day on which the return is due as provided by law, not
182     including the extension of time, the person fails to pay:
183          (i) for a person filing a corporate franchise or income tax return under Chapter 7,
184     Corporate Franchise and Income Taxes, the payment required by Subsection 59-7-507(1)(b); or
185          (ii) for a person filing an individual income tax return under Chapter 10, Individual
186     Income Tax Act, the payment required by Subsection 59-10-516(2).
187          (b) For purposes of Subsection (5)(a), the penalty per month during the period of the
188     extension of time for filing the return is an amount equal to 2% of the tax due on the return,
189     unpaid as of the day on which the return is due as provided by law.
190          (6) If a person does not file a return within an extension of time allowed by Section
191     59-7-505 or 59-10-516, the person:
192          (a) is not subject to a penalty in the amount described in Subsection (5)(b); and
193          (b) is subject to a penalty in an amount equal to the sum of:
194          (i) a late file penalty in an amount equal to the greater of:
195          (A) $20; or
196          (B) 10% of the tax due on the return, unpaid as of the day on which the return is due as
197     provided by law, not including the extension of time; and
198          (ii) a late pay penalty in an amount equal to the greater of:
199          (A) $20; or
200          (B) 10% of the unpaid tax due on the return, unpaid as of the day on which the return is
201     due as provided by law, not including the extension of time.
202          (7) (a) Additional penalties for an underpayment of a tax, fee, or charge are as provided
203     in this Subsection (7)(a).
204          (i) Except as provided in Subsection (7)(c), if any portion of an underpayment of a tax,
205     fee, or charge is due to negligence, the penalty is 10% of the portion of the underpayment that
206     is due to negligence.
207          (ii) Except as provided in Subsection (7)(d), if any portion of an underpayment of a
208     tax, fee, or charge is due to intentional disregard of law or rule, the penalty is 15% of the entire
209     underpayment.
210          (iii) If any portion of an underpayment is due to an intent to evade a tax, fee, or charge,
211     the penalty is the greater of $500 per period or 50% of the entire underpayment.

212          (iv) If any portion of an underpayment is due to fraud with intent to evade a tax, fee, or
213     charge, the penalty is the greater of $500 per period or 100% of the entire underpayment.
214          (b) If the commission determines that a person is liable for a penalty imposed under
215     Subsection (7)(a)(ii), (iii), or (iv), the commission shall notify the person of the proposed
216     penalty.
217          (i) The notice of proposed penalty shall:
218          (A) set forth the basis of the assessment; and
219          (B) be mailed by certified mail, postage prepaid, to the person's last-known address.
220          (ii) Upon receipt of the notice of proposed penalty, the person against whom the
221     penalty is proposed may:
222          (A) pay the amount of the proposed penalty at the place and time stated in the notice;
223     or
224          (B) proceed in accordance with the review procedures of Subsection (7)(b)(iii).
225          (iii) A person against whom a penalty is proposed in accordance with this Subsection
226     (7) may contest the proposed penalty by filing a petition for an adjudicative proceeding with
227     the commission.
228          (iv) (A) If the commission determines that a person is liable for a penalty under this
229     Subsection (7), the commission shall assess the penalty and give notice and demand for
230     payment.
231          (B) The commission shall mail the notice and demand for payment described in
232     Subsection (7)(b)(iv)(A):
233          (I) to the person's last-known address; and
234          (II) in accordance with Section 59-1-1404.
235          (c) A seller that voluntarily collects a tax under Subsection 59-12-107(2)[(d)](f)(i) is
236     not subject to the penalty under Subsection (7)(a)(i) if on or after July 1, 2001:
237          (i) a court of competent jurisdiction issues a final, unappealable judgment or order
238     determining that:
239          (A) the seller meets one or more of the criteria described in Subsection 59-12-107(2)(a)
240     or is a seller required to pay or collect and remit sales and use taxes under Subsection
241     59-12-107(2)(b) or (d); and
242          (B) the commission or a county, city, or town may require the seller to collect a tax

243     under Subsections 59-12-103(2)(a) through (d); or
244          (ii) the commission issues a final, unappealable administrative order determining that:
245          (A) the seller meets one or more of the criteria described in Subsection 59-12-107(2)(a)
246     or is a seller required to pay or collect and remit sales and use taxes under Subsection
247     59-12-107(2)(b) or (d); and
248          (B) the commission or a county, city, or town may require the seller to collect a tax
249     under Subsections 59-12-103(2)(a) through (d).
250          (d) A seller that voluntarily collects a tax under Subsection 59-12-107(2)[(d)](f)(i) is
251     not subject to the penalty under Subsection (7)(a)(ii) if:
252          (i) (A) a court of competent jurisdiction issues a final, unappealable judgment or order
253     determining that:
254          (I) the seller meets one or more of the criteria described in Subsection 59-12-107(2)(a)
255     or is a seller required to pay or collect and remit sales and use taxes under Subsection
256     59-12-107(2)(b) or (d); and
257          (II) the commission or a county, city, or town may require the seller to collect a tax
258     under Subsections 59-12-103(2)(a) through (d); or
259          (B) the commission issues a final, unappealable administrative order determining that:
260          (I) the seller meets one or more of the criteria described in Subsection 59-12-107(2)(a)
261     or is a seller required to pay or collect and remit sales and use taxes under Subsection
262     59-12-107(2)(b) or (d); and
263          (II) the commission or a county, city, or town may require the seller to collect a tax
264     under Subsections 59-12-103(2)(a) through (d); and
265          (ii) the seller's intentional disregard of law or rule is warranted by existing law or by a
266     nonfrivolous argument for the extension, modification, or reversal of existing law or the
267     establishment of new law.
268          (8) (a) Subject to Subsections (8)(b) and (c), the penalty for failure to file an
269     information return, information report, or a complete supporting schedule is $50 for each
270     information return, information report, or supporting schedule up to a maximum of $1,000.
271          (b) If an employer is subject to a penalty under Subsection (13), the employer may not
272     be subject to a penalty under Subsection (8)(a).
273          (c) If an employer is subject to a penalty under this Subsection (8) for failure to file a

274     return in accordance with Subsection 59-10-406(3) on or before the due date described in
275     Subsection 59-10-406(3)(b)(ii), the commission may not impose a penalty under this
276     Subsection (8) unless the return is filed more than 14 days after the due date described in
277     Subsection 59-10-406(3)(b)(ii).
278          (9) If a person, in furtherance of a frivolous position, has a prima facie intent to delay
279     or impede administration of a law relating to a tax, fee, or charge and files a purported return
280     that fails to contain information from which the correctness of reported tax, fee, or charge
281     liability can be determined or that clearly indicates that the tax, fee, or charge liability shown is
282     substantially incorrect, the penalty is $500.
283          (10) (a) A seller that fails to remit a tax, fee, or charge monthly as required by
284     Subsection 59-12-108(1)(a):
285          (i) is subject to a penalty described in Subsection (2); and
286          (ii) may not retain the percentage of sales and use taxes that would otherwise be
287     allowable under Subsection 59-12-108(2).
288          (b) A seller that fails to remit a tax, fee, or charge by electronic funds transfer as
289     required by Subsection 59-12-108(1)(a)(ii)(B):
290          (i) is subject to a penalty described in Subsection (2); and
291          (ii) may not retain the percentage of sales and use taxes that would otherwise be
292     allowable under Subsection 59-12-108(2).
293          (11) (a) A person is subject to the penalty provided in Subsection (11)(c) if that person:
294          (i) commits an act described in Subsection (11)(b) with respect to one or more of the
295     following documents:
296          (A) a return;
297          (B) an affidavit;
298          (C) a claim; or
299          (D) a document similar to Subsections (11)(a)(i)(A) through (C);
300          (ii) knows or has reason to believe that the document described in Subsection (11)(a)(i)
301     will be used in connection with any material matter administered by the commission; and
302          (iii) knows that the document described in Subsection (11)(a)(i), if used in connection
303     with any material matter administered by the commission, would result in an understatement of
304     another person's liability for a tax, fee, or charge.

305          (b) The following acts apply to Subsection (11)(a)(i):
306          (i) preparing any portion of a document described in Subsection (11)(a)(i);
307          (ii) presenting any portion of a document described in Subsection (11)(a)(i);
308          (iii) procuring any portion of a document described in Subsection (11)(a)(i);
309          (iv) advising in the preparation or presentation of any portion of a document described
310     in Subsection (11)(a)(i);
311          (v) aiding in the preparation or presentation of any portion of a document described in
312     Subsection (11)(a)(i);
313          (vi) assisting in the preparation or presentation of any portion of a document described
314     in Subsection (11)(a)(i); or
315          (vii) counseling in the preparation or presentation of any portion of a document
316     described in Subsection (11)(a)(i).
317          (c) For purposes of Subsection (11)(a), the penalty:
318          (i) shall be imposed by the commission;
319          (ii) is $500 for each document described in Subsection (11)(a)(i) with respect to which
320     the person described in Subsection (11)(a) meets the requirements of Subsection (11)(a); and
321          (iii) is in addition to any other penalty provided by law.
322          (d) The commission may seek a court order to enjoin a person from engaging in
323     conduct that is subject to a penalty under this Subsection (11).
324          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
325     commission may make rules prescribing the documents that are similar to Subsections
326     (11)(a)(i)(A) through (C).
327          (12) (a) As provided in Section 76-8-1101, criminal offenses and penalties are as
328     provided in Subsections (12)(b) through (e).
329          (b) (i) A person [who] is guilty of a class B misdemeanor if the person:
330          (A) is required by this title or any laws the commission administers or regulates to
331     register with or obtain a license or permit from the commission[, who]; and
332          (B) operates without having registered or secured a license or permit[,] or [who]
333     operates when the registration, license, or permit is expired or not current[, is guilty of a class
334     B misdemeanor].
335          (ii) Notwithstanding Section 76-3-301, for purposes of Subsection (12)(b)(i), the

336     penalty may not:
337          (A) be less than $500; or
338          (B) exceed $1,000.
339          (c) (i) With respect to a tax, fee, or charge, a person [who] is guilty of a third degree
340     felony if the person:
341          (A) knowingly and intentionally, and without a reasonable good faith basis, fails to
342     make, render, sign, or verify a return within the time required by law or to supply information
343     within the time required by law[, or who];
344          (B) makes, renders, signs, or verifies a false or fraudulent return or statement[,]; or
345     [who]
346          (C) supplies false or fraudulent information[, is guilty of a third degree felony].
347          (ii) Notwithstanding Section 76-3-301, for purposes of Subsection (12)(c)(i), the
348     penalty may not:
349          (A) be less than $1,000; or
350          (B) exceed $5,000.
351          (d) (i) A person who intentionally or willfully attempts to evade or defeat a tax, fee, or
352     charge or the payment of a tax, fee, or charge is, in addition to other penalties provided by law,
353     guilty of a second degree felony.
354          (ii) Notwithstanding Section 76-3-301, for purposes of Subsection (12)(d)(i), the
355     penalty may not:
356          (A) be less than $1,500; or
357          (B) exceed $25,000.
358          (e) (i) A person is guilty of a second degree felony if that person commits an act:
359          (A) described in Subsection (12)(e)(ii) with respect to one or more of the following
360     documents:
361          (I) a return;
362          (II) an affidavit;
363          (III) a claim; or
364          (IV) a document similar to Subsections (12)(e)(i)(A)(I) through (III); and
365          (B) subject to Subsection (12)(e)(iii), with knowledge that the document described in
366     Subsection (12)(e)(i)(A):

367          (I) is false or fraudulent as to any material matter; and
368          (II) could be used in connection with any material matter administered by the
369     commission.
370          (ii) The following acts apply to Subsection (12)(e)(i):
371          (A) preparing any portion of a document described in Subsection (12)(e)(i)(A);
372          (B) presenting any portion of a document described in Subsection (12)(e)(i)(A);
373          (C) procuring any portion of a document described in Subsection (12)(e)(i)(A);
374          (D) advising in the preparation or presentation of any portion of a document described
375     in Subsection (12)(e)(i)(A);
376          (E) aiding in the preparation or presentation of any portion of a document described in
377     Subsection (12)(e)(i)(A);
378          (F) assisting in the preparation or presentation of any portion of a document described
379     in Subsection (12)(e)(i)(A); or
380          (G) counseling in the preparation or presentation of any portion of a document
381     described in Subsection (12)(e)(i)(A).
382          (iii) This Subsection (12)(e) applies:
383          (A) regardless of whether the person for which the document described in Subsection
384     (12)(e)(i)(A) is prepared or presented:
385          (I) knew of the falsity of the document described in Subsection (12)(e)(i)(A); or
386          (II) consented to the falsity of the document described in Subsection (12)(e)(i)(A); and
387          (B) in addition to any other penalty provided by law.
388          (iv) Notwithstanding Section 76-3-301, for purposes of this Subsection (12)(e), the
389     penalty may not:
390          (A) be less than $1,500; or
391          (B) exceed $25,000.
392          (v) The commission may seek a court order to enjoin a person from engaging in
393     conduct that is subject to a penalty under this Subsection (12)(e).
394          (vi) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
395     the commission may make rules prescribing the documents that are similar to Subsections
396     (12)(e)(i)(A)(I) through (III).
397          (f) The statute of limitations for prosecution for a violation of this Subsection (12) is

398     the later of six years:
399          (i) from the date the tax should have been remitted; or
400          (ii) after the day on which the person commits the criminal offense.
401          (13) (a) Subject to Subsection (13)(b), an employer that is required to file a form with
402     the commission in accordance with Subsection 59-10-406(8) is subject to a penalty described
403     in Subsection (13)(b) if the employer:
404          (i) fails to file the form with the commission in an electronic format approved by the
405     commission as required by Subsection 59-10-406(8);
406          (ii) fails to file the form on or before the due date provided in Subsection 59-10-406(8);
407          (iii) fails to provide accurate information on the form; or
408          (iv) fails to provide all of the information required by the Internal Revenue Service to
409     be contained on the form.
410          (b) For purposes of Subsection (13)(a), the penalty is:
411          (i) $30 per form, not to exceed $75,000 in a calendar year, if the employer files the
412     form in accordance with Subsection 59-10-406(8), more than 14 days after the due date
413     provided in Subsection 59-10-406(8) but no later than 30 days after the due date provided in
414     Subsection 59-10-406(8);
415          (ii) $60 per form, not to exceed $200,000 in a calendar year, if the employer files the
416     form in accordance with Subsection 59-10-406(8), more than 30 days after the due date
417     provided in Subsection 59-10-406(8) but on or before June 1; or
418          (iii) $100 per form, not to exceed $500,000 in a calendar year, if the employer:
419          (A) files the form in accordance with Subsection 59-10-406(8) after June 1; or
420          (B) fails to file the form.
421          (14) Upon making a record of its actions, and upon reasonable cause shown, the
422     commission may waive, reduce, or compromise any of the penalties or interest imposed under
423     this part.
424          Section 2. Section 59-12-103 is amended to read:
425          59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
426     tax revenues.
427          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
428     charged for the following transactions:

429          (a) retail sales of tangible personal property made within the state;
430          (b) amounts paid for:
431          (i) telecommunications service, other than mobile telecommunications service, that
432     originates and terminates within the boundaries of this state;
433          (ii) mobile telecommunications service that originates and terminates within the
434     boundaries of one state only to the extent permitted by the Mobile Telecommunications
435     Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
436          (iii) an ancillary service associated with a:
437          (A) telecommunications service described in Subsection (1)(b)(i); or
438          (B) mobile telecommunications service described in Subsection (1)(b)(ii);
439          (c) sales of the following for commercial use:
440          (i) gas;
441          (ii) electricity;
442          (iii) heat;
443          (iv) coal;
444          (v) fuel oil; or
445          (vi) other fuels;
446          (d) sales of the following for residential use:
447          (i) gas;
448          (ii) electricity;
449          (iii) heat;
450          (iv) coal;
451          (v) fuel oil; or
452          (vi) other fuels;
453          (e) sales of prepared food;
454          (f) except as provided in Section 59-12-104, amounts paid or charged as admission or
455     user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
456     exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
457     fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
458     television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
459     driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,

460     tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
461     horseback rides, sports activities, or any other amusement, entertainment, recreation,
462     exhibition, cultural, or athletic activity;
463          (g) amounts paid or charged for services for repairs or renovations of tangible personal
464     property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
465          (i) the tangible personal property; and
466          (ii) parts used in the repairs or renovations of the tangible personal property described
467     in Subsection (1)(g)(i), regardless of whether:
468          (A) any parts are actually used in the repairs or renovations of that tangible personal
469     property; or
470          (B) the particular parts used in the repairs or renovations of that tangible personal
471     property are exempt from a tax under this chapter;
472          (h) except as provided in Subsection 59-12-104(7), amounts paid or charged for
473     assisted cleaning or washing of tangible personal property;
474          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
475     accommodations and services that are regularly rented for less than 30 consecutive days;
476          (j) amounts paid or charged for laundry or dry cleaning services;
477          (k) amounts paid or charged for leases or rentals of tangible personal property if within
478     this state the tangible personal property is:
479          (i) stored;
480          (ii) used; or
481          (iii) otherwise consumed;
482          (l) amounts paid or charged for tangible personal property if within this state the
483     tangible personal property is:
484          (i) stored;
485          (ii) used; or
486          (iii) consumed; and
487          (m) amounts paid or charged for a sale:
488          (i) (A) of a product transferred electronically; or
489          (B) of a repair or renovation of a product transferred electronically; and
490          (ii) regardless of whether the sale provides:

491          (A) a right of permanent use of the product; or
492          (B) a right to use the product that is less than a permanent use, including a right:
493          (I) for a definite or specified length of time; and
494          (II) that terminates upon the occurrence of a condition.
495          (2) (a) Except as provided in Subsections (2)(b) through (e), a state tax and a local tax
496     is imposed on a transaction described in Subsection (1) equal to the sum of:
497          (i) a state tax imposed on the transaction at a tax rate equal to the sum of:
498          (A) [4.70%; and] the state sales and use tax rate, described in Subsection
499     59-12-103.3(2); and
500          (B) (I) the tax rate the state imposes in accordance with Part 18, Additional State Sales
501     and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
502     through 59-12-215 is in a county in which the state imposes the tax under Part 18, Additional
503     State Sales and Use Tax Act; and
504          (II) the tax rate the state imposes in accordance with Part 20, Supplemental State Sales
505     and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
506     through 59-12-215 is in a city, town, or the unincorporated area of a county in which the state
507     imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
508          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
509     transaction under this chapter other than this part.
510          (b) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
511     on a transaction described in Subsection (1)(d) equal to the sum of:
512          (i) a state tax imposed on the transaction at a tax rate of 2%; and
513          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
514     transaction under this chapter other than this part.
515          (c) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
516     on amounts paid or charged for food and food ingredients equal to the sum of:
517          (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
518     a tax rate of 1.75%; and
519          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
520     amounts paid or charged for food and food ingredients under this chapter other than this part.
521          (d) (i) For a bundled transaction that is attributable to food and food ingredients and

522     tangible personal property other than food and food ingredients, a state tax and a local tax is
523     imposed on the entire bundled transaction equal to the sum of:
524          (A) a state tax imposed on the entire bundled transaction equal to the sum of:
525          (I) the tax rate described in Subsection (2)(a)(i)(A); and
526          (II) (Aa) the tax rate the state imposes in accordance with Part 18, Additional State
527     Sales and Use Tax Act, if the location of the transaction as determined under Sections
528     59-12-211 through 59-12-215 is in a county in which the state imposes the tax under Part 18,
529     Additional State Sales and Use Tax Act; and
530          (Bb) the tax rate the state imposes in accordance with Part 20, Supplemental State
531     Sales and Use Tax Act, if the location of the transaction as determined under Sections
532     59-12-211 through 59-12-215 is in a city, town, or the unincorporated area of a county in which
533     the state imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
534          (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
535     described in Subsection (2)(a)(ii).
536          (ii) If an optional computer software maintenance contract is a bundled transaction that
537     consists of taxable and nontaxable products that are not separately itemized on an invoice or
538     similar billing document, the purchase of the optional computer software maintenance contract
539     is 40% taxable under this chapter and 60% nontaxable under this chapter.
540          (iii) Subject to Subsection (2)(d)(iv), for a bundled transaction other than a bundled
541     transaction described in Subsection (2)(d)(i) or (ii):
542          (A) if the sales price of the bundled transaction is attributable to tangible personal
543     property, a product, or a service that is subject to taxation under this chapter and tangible
544     personal property, a product, or service that is not subject to taxation under this chapter, the
545     entire bundled transaction is subject to taxation under this chapter unless:
546          (I) the seller is able to identify by reasonable and verifiable standards the tangible
547     personal property, product, or service that is not subject to taxation under this chapter from the
548     books and records the seller keeps in the seller's regular course of business; or
549          (II) state or federal law provides otherwise; or
550          (B) if the sales price of a bundled transaction is attributable to two or more items of
551     tangible personal property, products, or services that are subject to taxation under this chapter
552     at different rates, the entire bundled transaction is subject to taxation under this chapter at the

553     higher tax rate unless:
554          (I) the seller is able to identify by reasonable and verifiable standards the tangible
555     personal property, product, or service that is subject to taxation under this chapter at the lower
556     tax rate from the books and records the seller keeps in the seller's regular course of business; or
557          (II) state or federal law provides otherwise.
558          (iv) For purposes of Subsection (2)(d)(iii), books and records that a seller keeps in the
559     seller's regular course of business includes books and records the seller keeps in the regular
560     course of business for nontax purposes.
561          (e) (i) Except as otherwise provided in this chapter and subject to Subsections (2)(e)(ii)
562     and (iii), if a transaction consists of the sale, lease, or rental of tangible personal property, a
563     product, or a service that is subject to taxation under this chapter, and the sale, lease, or rental
564     of tangible personal property, other property, a product, or a service that is not subject to
565     taxation under this chapter, the entire transaction is subject to taxation under this chapter unless
566     the seller, at the time of the transaction:
567          (A) separately states the portion of the transaction that is not subject to taxation under
568     this chapter on an invoice, bill of sale, or similar document provided to the purchaser; or
569          (B) is able to identify by reasonable and verifiable standards, from the books and
570     records the seller keeps in the seller's regular course of business, the portion of the transaction
571     that is not subject to taxation under this chapter.
572          (ii) A purchaser and a seller may correct the taxability of a transaction if:
573          (A) after the transaction occurs, the purchaser and the seller discover that the portion of
574     the transaction that is not subject to taxation under this chapter was not separately stated on an
575     invoice, bill of sale, or similar document provided to the purchaser because of an error or
576     ignorance of the law; and
577          (B) the seller is able to identify by reasonable and verifiable standards, from the books
578     and records the seller keeps in the seller's regular course of business, the portion of the
579     transaction that is not subject to taxation under this chapter.
580          (iii) For purposes of Subsections (2)(e)(i) and (ii), books and records that a seller keeps
581     in the seller's regular course of business includes books and records the seller keeps in the
582     regular course of business for nontax purposes.
583          (f) (i) If the sales price of a transaction is attributable to two or more items of tangible

584     personal property, products, or services that are subject to taxation under this chapter at
585     different rates, the entire purchase is subject to taxation under this chapter at the higher tax rate
586     unless the seller, at the time of the transaction:
587          (A) separately states the items subject to taxation under this chapter at each of the
588     different rates on an invoice, bill of sale, or similar document provided to the purchaser; or
589          (B) is able to identify by reasonable and verifiable standards the tangible personal
590     property, product, or service that is subject to taxation under this chapter at the lower tax rate
591     from the books and records the seller keeps in the seller's regular course of business.
592          (ii) For purposes of Subsection (2)(f)(i), books and records that a seller keeps in the
593     seller's regular course of business includes books and records the seller keeps in the regular
594     course of business for nontax purposes.
595          (g) Subject to Subsections (2)(h) and (i), a tax rate repeal or tax rate change for a tax
596     rate imposed under the following shall take effect on the first day of a calendar quarter:
597          (i) Subsection (2)(a)(i)(A);
598          (ii) Subsection (2)(b)(i);
599          (iii) Subsection (2)(c)(i); or
600          (iv) Subsection (2)(d)(i)(A)(I).
601          (h) (i) A tax rate increase takes effect on the first day of the first billing period that
602     begins on or after the effective date of the tax rate increase if the billing period for the
603     transaction begins before the effective date of a tax rate increase imposed under:
604          (A) Subsection (2)(a)(i)(A);
605          (B) Subsection (2)(b)(i);
606          (C) Subsection (2)(c)(i); or
607          (D) Subsection (2)(d)(i)(A)(I).
608          (ii) The repeal of a tax or a tax rate decrease applies to a billing period if the billing
609     statement for the billing period is rendered on or after the effective date of the repeal of the tax
610     or the tax rate decrease imposed under:
611          (A) Subsection (2)(a)(i)(A);
612          (B) Subsection (2)(b)(i);
613          (C) Subsection (2)(c)(i); or
614          (D) Subsection (2)(d)(i)(A)(I).

615          (i) (i) For a tax rate described in Subsection (2)(i)(ii), if a tax due on a catalogue sale is
616     computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal or
617     change in a tax rate takes effect:
618          (A) on the first day of a calendar quarter; and
619          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
620          (ii) Subsection (2)(i)(i) applies to the tax rates described in the following:
621          (A) Subsection (2)(a)(i)(A);
622          (B) Subsection (2)(b)(i);
623          (C) Subsection (2)(c)(i); or
624          (D) Subsection (2)(d)(i)(A)(I).
625          (iii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
626     the commission may by rule define the term "catalogue sale."
627          (3) (a) The following state taxes shall be deposited into the General Fund:
628          (i) the tax imposed by Subsection (2)(a)(i)(A);
629          (ii) the tax imposed by Subsection (2)(b)(i);
630          (iii) the tax imposed by Subsection (2)(c)(i); or
631          (iv) the tax imposed by Subsection (2)(d)(i)(A)(I).
632          (b) The following local taxes shall be distributed to a county, city, or town as provided
633     in this chapter:
634          (i) the tax imposed by Subsection (2)(a)(ii);
635          (ii) the tax imposed by Subsection (2)(b)(ii);
636          (iii) the tax imposed by Subsection (2)(c)(ii); and
637          (iv) the tax imposed by Subsection (2)(d)(i)(B).
638          (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
639     2003, the lesser of the following amounts shall be expended as provided in Subsections (4)(b)
640     through (g):
641          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
642          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
643          (B) for the fiscal year; or
644          (ii) $17,500,000.
645          (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount

646     described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
647     Department of Natural Resources to:
648          (A) implement the measures described in Subsections 79-2-303(3)(a) through (d) to
649     protect sensitive plant and animal species; or
650          (B) award grants, up to the amount authorized by the Legislature in an appropriations
651     act, to political subdivisions of the state to implement the measures described in Subsections
652     79-2-303(3)(a) through (d) to protect sensitive plant and animal species.
653          (ii) Money transferred to the Department of Natural Resources under Subsection
654     (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
655     person to list or attempt to have listed a species as threatened or endangered under the
656     Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
657          (iii) At the end of each fiscal year:
658          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
659     Conservation and Development Fund created in Section 73-10-24;
660          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
661     Program Subaccount created in Section 73-10c-5; and
662          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
663     Program Subaccount created in Section 73-10c-5.
664          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
665     Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
666     created in Section 4-18-106.
667          (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
668     in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
669     Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
670     water rights.
671          (ii) At the end of each fiscal year:
672          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
673     Conservation and Development Fund created in Section 73-10-24;
674          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
675     Program Subaccount created in Section 73-10c-5; and
676          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan

677     Program Subaccount created in Section 73-10c-5.
678          (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
679     in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
680     Fund created in Section 73-10-24 for use by the Division of Water Resources.
681          (ii) In addition to the uses allowed of the Water Resources Conservation and
682     Development Fund under Section 73-10-24, the Water Resources Conservation and
683     Development Fund may also be used to:
684          (A) conduct hydrologic and geotechnical investigations by the Division of Water
685     Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
686     quantifying surface and ground water resources and describing the hydrologic systems of an
687     area in sufficient detail so as to enable local and state resource managers to plan for and
688     accommodate growth in water use without jeopardizing the resource;
689          (B) fund state required dam safety improvements; and
690          (C) protect the state's interest in interstate water compact allocations, including the
691     hiring of technical and legal staff.
692          (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
693     in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
694     created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
695          (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
696     in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
697     created in Section 73-10c-5 for use by the Division of Drinking Water to:
698          (i) provide for the installation and repair of collection, treatment, storage, and
699     distribution facilities for any public water system, as defined in Section 19-4-102;
700          (ii) develop underground sources of water, including springs and wells; and
701          (iii) develop surface water sources.
702          (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
703     2006, the difference between the following amounts shall be expended as provided in this
704     Subsection (5), if that difference is greater than $1:
705          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
706     fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
707          (ii) $17,500,000.

708          (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
709          (A) transferred each fiscal year to the Department of Natural Resources as dedicated
710     credits; and
711          (B) expended by the Department of Natural Resources for watershed rehabilitation or
712     restoration.
713          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
714     in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
715     created in Section 73-10-24.
716          (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
717     remaining difference described in Subsection (5)(a) shall be:
718          (A) transferred each fiscal year to the Division of Water Resources as dedicated
719     credits; and
720          (B) expended by the Division of Water Resources for cloud-seeding projects
721     authorized by Title 73, Chapter 15, Modification of Weather.
722          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
723     in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund
724     created in Section 73-10-24.
725          (d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
726     remaining difference described in Subsection (5)(a) shall be deposited into the Water
727     Resources Conservation and Development Fund created in Section 73-10-24 for use by the
728     Division of Water Resources for:
729          (i) preconstruction costs:
730          (A) as defined in Subsection 73-26-103(6) for projects authorized by Title 73, Chapter
731     26, Bear River Development Act; and
732          (B) as defined in Subsection 73-28-103(8) for the Lake Powell Pipeline project
733     authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
734          (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
735     Chapter 26, Bear River Development Act;
736          (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
737     authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
738          (iv) other uses authorized under Sections 73-10-24, 73-10-25.1, 73-10-30, and

739     Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
740          (e) After making the transfers required by Subsections (5)(b) and (c) and subject to
741     Subsection (5)(f), 6% of the remaining difference described in Subsection (5)(a) shall be
742     transferred each year as dedicated credits to the Division of Water Rights to cover the costs
743     incurred for employing additional technical staff for the administration of water rights.
744          (f) At the end of each fiscal year, any unexpended dedicated credits described in
745     Subsection (5)(e) over $150,000 lapse to the Water Resources Conservation and Development
746     Fund created in Section 73-10-24.
747          (6) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
748     2003, and for taxes listed under Subsection (3)(a), the amount of revenue generated by a 1/16%
749     tax rate on the transactions described in Subsection (1) for the fiscal year shall be deposited in
750     the Transportation Fund created by Section 72-2-102.
751          (7) Notwithstanding Subsection (3)(a), beginning on July 1, 2012, the Division of
752     Finance shall deposit into the Transportation Investment Fund of 2005 created in Section
753     72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
754     by a 1/64% tax rate on the taxable transactions under Subsection (1).
755          (8) (a) Notwithstanding Subsection (3)(a), in addition to the amounts deposited in
756     Subsection (7), and subject to Subsection (8)(b), for a fiscal year beginning on or after July 1,
757     2012, the Division of Finance shall deposit into the Transportation Investment Fund of 2005
758     created by Section 72-2-124:
759          (i) a portion of the taxes listed under Subsection (3)(a) in an amount equal to 8.3% of
760     the revenues collected from the following taxes, which represents a portion of the
761     approximately 17% of sales and use tax revenues generated annually by the sales and use tax
762     on vehicles and vehicle-related products:
763          (A) the tax imposed by Subsection (2)(a)(i)(A);
764          (B) the tax imposed by Subsection (2)(b)(i);
765          (C) the tax imposed by Subsection (2)(c)(i); and
766          (D) the tax imposed by Subsection (2)(d)(i)(A)(I); plus
767          (ii) an amount equal to 30% of the growth in the amount of revenues collected in the
768     current fiscal year from the sales and use taxes described in Subsections (8)(a)(i)(A) through
769     (D) that exceeds the amount collected from the sales and use taxes described in Subsections

770     (8)(a)(i)(A) through (D) in the 2010-11 fiscal year.
771          (b) (i) Subject to Subsections (8)(b)(ii) and (iii), in any fiscal year that the portion of
772     the sales and use taxes deposited under Subsection (8)(a) represents an amount that is a total
773     lower percentage of the sales and use taxes described in Subsections (8)(a)(i)(A) through (D)
774     generated in the current fiscal year than the total percentage of sales and use taxes deposited in
775     the previous fiscal year, the Division of Finance shall deposit an amount under Subsection
776     (8)(a) equal to the product of:
777          (A) the total percentage of sales and use taxes deposited under Subsection (8)(a) in the
778     previous fiscal year; and
779          (B) the total sales and use tax revenue generated by the taxes described in Subsections
780     (8)(a)(i)(A) through (D) in the current fiscal year.
781          (ii) In any fiscal year in which the portion of the sales and use taxes deposited under
782     Subsection (8)(a) would exceed 17% of the revenues collected from the sales and use taxes
783     described in Subsections (8)(a)(i)(A) through (D) in the current fiscal year, the Division of
784     Finance shall deposit 17% of the revenues collected from the sales and use taxes described in
785     Subsections (8)(a)(i)(A) through (D) for the current fiscal year under Subsection (8)(a).
786          (iii) In all subsequent fiscal years after a year in which 17% of the revenues collected
787     from the sales and use taxes described in Subsections (8)(a)(i)(A) through (D) was deposited
788     under Subsection (8)(a), the Division of Finance shall annually deposit 17% of the revenues
789     collected from the sales and use taxes described in Subsections (8)(a)(i)(A) through (D) in the
790     current fiscal year under Subsection (8)(a).
791          (9) Notwithstanding Subsection (3)(a), and in addition to the amounts deposited under
792     Subsections (7) and (8), for a fiscal year beginning on or after July 1, 2012, the Division of
793     Finance shall annually deposit $90,000,000 of the revenues generated by the taxes listed under
794     Subsection (3)(a) into the Transportation Investment Fund of 2005 created by Section
795     72-2-124.
796          (10) Notwithstanding Subsection (3)(a), for each fiscal year beginning with fiscal year
797     2009-10, $533,750 shall be deposited into the Qualified Emergency Food Agencies Fund
798     created by Section 35A-8-1009 and expended as provided in Section 35A-8-1009.
799          (11) (a) Notwithstanding Subsection (3)(a), except as provided in Subsection (11)(b),
800     and in addition to any amounts deposited under Subsections (7), (8), and (9), beginning on July

801     1, 2012, the Division of Finance shall deposit into the Transportation Investment Fund of 2005
802     created by Section 72-2-124 the amount of tax revenue generated by a .025% tax rate on the
803     transactions described in Subsection (1).
804          (b) For purposes of Subsection (11)(a), the Division of Finance may not deposit into
805     the Transportation Investment Fund of 2005 any tax revenue generated by amounts paid or
806     charged for food and food ingredients, except for tax revenue generated by a bundled
807     transaction attributable to food and food ingredients and tangible personal property other than
808     food and food ingredients described in Subsection (2)(d).
809          (12) (a) Notwithstanding Subsection (3)(a), and except as provided in Subsection
810     (12)(b), beginning on January 1, 2009, the Division of Finance shall deposit into the
811     Transportation Fund created by Section 72-2-102 the amount of tax revenue generated by a
812     .025% tax rate on the transactions described in Subsection (1) to be expended to address
813     chokepoints in construction management.
814          (b) For purposes of Subsection (12)(a), the Division of Finance may not deposit into
815     the Transportation Fund any tax revenue generated by amounts paid or charged for food and
816     food ingredients, except for tax revenue generated by a bundled transaction attributable to food
817     and food ingredients and tangible personal property other than food and food ingredients
818     described in Subsection (2)(d).
819          (13) Notwithstanding Subsection (3)(a), beginning the second fiscal year after the
820     fiscal year during which the Division of Finance receives notice under Subsection
821     63N-2-510[(3)](2) that construction on a qualified hotel, as defined in Section 63N-2-502, has
822     begun, the Division of Finance shall, for two consecutive fiscal years, annually deposit
823     $1,900,000 of the revenue generated by the taxes listed under Subsection (3)(a) into the Hotel
824     Impact Mitigation Fund, created in Section 63N-2-512.
825          (14) Notwithstanding Subsections (4) through (13), an amount required to be expended
826     or deposited in accordance with Subsections (4) through (13) may not include an amount the
827     Division of Finance deposits in accordance with Section 59-12-103.2.
828          Section 3. Section 59-12-103.1 is amended to read:
829          59-12-103.1. Action by Supreme Court of the United States authorizing or action
830     by Congress permitting a state to require certain sellers to collect a sales or use tax --
831     Collection of tax by commission -- Commission report to Revenue and Taxation Interim

832     Committee -- Revenue and Taxation Interim Committee study -- Division of Finance
833     requirement to make certain deposits.
834          (1) Except as provided in Section 59-12-107.1, a seller shall remit a tax to the
835     commission as provided in Section 59-12-107 if:
836          (a) the Supreme Court of the United States issues a decision authorizing a state to
837     require the following sellers to collect a sales or use tax:
838          (i) a seller that does not meet one or more of the criteria described in Subsection
839     59-12-107(2)(a); or
840          (ii) a seller that is not a seller required to pay or collect and remit sales and use taxes
841     under Subsection 59-12-107(2)(b) or (d); or
842          (b) Congress permits the state to require the following sellers to collect a sales or use
843     tax:
844          (i) a seller that does not meet one or more of the criteria described in Subsection
845     59-12-107(2)(a); or
846          (ii) a seller that is not a seller required to pay or collect and remit sales and use taxes
847     under Subsection 59-12-107(2)(b) or (d).
848          (2) The commission shall:
849          [(a) collect the tax described in Subsection (1) from the seller:]
850          [(i) to the extent:]
851          [(A) authorized by the Supreme Court of the United States; or]
852          [(B) permitted by Congress; and]
853          [(ii) beginning on the first day of a calendar quarter as prescribed by the Revenue and
854     Taxation Interim Committee; and]
855          [(b)] (a) make a report to the Revenue and Taxation Interim Committee:
856          (i) regarding the actions taken by:
857          (A) the Supreme Court of the United States; or
858          (B) Congress;
859          (ii) (A) stating the amount of state revenue collected at the time of the report, if any;
860     and
861          (B) estimating the state sales and use tax rate reduction that would offset the amount of
862     state revenue estimated to be collected for the current fiscal year and the next fiscal year; and

863          (iii) (A) at the Revenue and Taxation Interim Committee meeting immediately
864     following the day on which the actions of the Supreme Court of the United States or Congress
865     become effective; and
866          (B) any other meeting of the Revenue and Taxation Interim Committee as requested by
867     the chairs of the committee[.]; and
868          (b) collect the tax described in Subsection (1) from the seller:
869          (i) to the extent:
870          (A) authorized by the Supreme Court of the United States; or
871          (B) permitted by Congress; and
872          (ii) beginning on the first day of a calendar quarter as prescribed by the Revenue and
873     Taxation Interim Committee.
874          (3) The Revenue and Taxation Interim Committee shall after hearing the commission's
875     report under Subsection (2)[(b)](a):
876          (a) review the actions taken by:
877          (i) the Supreme Court of the United States; or
878          (ii) Congress;
879          (b) direct the commission regarding the day on which the commission is required to
880     collect the tax described in Subsection (1); and
881          (c) make recommendations to the Legislative Management Committee:
882          (i) regarding whether as a result of the actions of the Supreme Court of the United
883     States or Congress any provisions of this chapter should be amended or repealed; and
884          (ii) within a one-year period after the day on which the commission makes a report
885     under Subsection (2)(b).
886          (4) The Division of Finance shall deposit a portion of the revenue collected under this
887     section into the Remote Sales Restricted Account as required by Section 59-12-103.2.
888          Section 4. Section 59-12-103.3 is enacted to read:
889          59-12-103.3. Definitions -- State sales and use tax rate calculation -- Notice.
890          (1) As used in this section:
891          (a) "Above-forecast state sales and use tax revenue" means sales and use tax revenue
892     remitted to the commission that is:
893          (i) collected from the tax imposed by Subsection 59-12-103(2)(a)(i)(A); and

894          (ii) greater than:
895          (A) for the fiscal year beginning on July 1, 2016, and ending on June 30, 2017,
896     $2,301,045,700;
897          (B) for the fiscal year beginning on July 1, 2017, and ending on June 30, 2018,
898     $2,409,953,600;
899          (C) for the fiscal year beginning on July 1, 2018, and ending on June 30, 2019,
900     $2,524,016,100; and
901          (D) for the fiscal year beginning on July 1, 2019, and ending on June 30, 2020,
902     $2,643,477,100.
903          (b) "State sales and use tax rate" means the tax rate calculated under Subsection (2).
904          (2) (a) Except as provided in Subsection (2)(b)(i), the state sales and use tax rate is
905     4.70%.
906          (b) (i) Subject to Subsection (2)(b)(ii), and except as provided in Subsection (2)(b)(iii)
907     or (iv):
908          (A) the state sales and use tax rate decreases by 0.1%, if the commission collects at
909     least $50,000,000, but less than $100,000,000, in above-forecast state sales and use tax revenue
910     for a fiscal year;
911          (B) the state sales and use tax rate decreases by 0.2%, if the commission collects at
912     least $100,000,000, but less than $150,000,000, in above-forecast state sales and use tax
913     revenue; and
914          (C) the state sales and use tax rate decreases by 0.3%, if the commission collects at
915     least $150,000,000 in above-forecast state sales and use tax revenue.
916          (ii) Any decrease to the state sales and use tax rate under Subsection (2)(b)(i) shall take
917     effect on July 1 of the year immediately following the fiscal year in which the applicable
918     threshold described in Subsection (2)(b)(i) is reached or exceeded.
919          (iii) The state sales and use tax rate may not decrease below 4.40%.
920          (iv) The state sales and use tax rate may not decrease, under this section, after July 1,
921     2021.
922          (3) The Office of the Legislative Fiscal Analyst shall annually, on or before January 1:
923          (a) determine the amount of above-forecast state sales and use tax revenue that the
924     commission collected for the previous fiscal year;

925          (b) calculate whether the commission collected enough above-forecast state sales and
926     use tax revenue to trigger a state sales and use tax rate decrease under Subsection (2)(b); and
927          (c) if the Office of the Legislative Fiscal Analyst determines that the commission
928     collected enough above-forecast state sales and use tax revenue for the previous fiscal year to
929     trigger a state sales and use tax rate decrease under Subsection (2)(b), report the above-forecast
930     state sales and use tax revenue to the Executive Appropriations Committee.
931          (4) Within 30 days after receiving the report described in Subsection (3), the Executive
932     Appropriations Committee shall notify the commission of:
933          (a) the amount of the above-forecast state sales and use tax revenue that the
934     commission collected for the previous fiscal year; and
935          (b) the decrease in rate, described in Subsection (2)(b)(i), that is applicable to the
936     amount described in Subsection (4)(a).
937          (5) If the commission collects enough above-forecast state sales and use tax revenue to
938     trigger a state sales and use tax rate decrease under Subsection (2)(b)(i), the commission shall
939     publish, post, or otherwise make public the new state sales and use tax rate that will be
940     effective July 1.
941          Section 5. Section 59-12-107 is amended to read:
942          59-12-107. Definitions -- Collection, remittance, and payment of tax by sellers or
943     other persons -- Returns -- Reports -- Direct payment by purchaser of vehicle -- Other
944     liability for collection -- Rulemaking authority -- Credits -- Treatment of bad debt --
945     Penalties and interest.
946          (1) As used in this section:
947          [(a) "Ownership" means direct ownership or indirect ownership through a parent,
948     subsidiary, or affiliate.]
949          [(b) "Related seller" means a seller that:]
950          [(i) meets one or more of the criteria described in Subsection (2)(a)(i); and]
951          [(ii) delivers tangible personal property, a service, or a product transferred
952     electronically that is sold:]
953          [(A) by a seller that does not meet one or more of the criteria described in Subsection
954     (2)(a)(i); and]
955          [(B) to a purchaser in the state.]

956          [(c) "Substantial ownership interest" means an ownership interest in a business entity if
957     that ownership interest is greater than the degree of ownership of equity interest specified in 15
958     U.S.C. Sec. 78p, with respect to a person other than a director or an officer.]
959          (a) (i) "Advertising" means:
960          (A) announcing by graphic, pictorial, verbal, written, or other similar means the
961     availability of a product for sale; or
962          (B) employing purchased space or time in print or electronic media if that purchased
963     space or time is used to communicate an announcement of a product for sale.
964          (ii) "Advertising" includes online advertising.
965          (b) "Affiliate" means:
966          (i) a person that is a member of the same controlled group of corporations as the seller;
967     or
968          (ii) another entity that, regardless of how that entity is organized, has the same
969     ownership relationship to a seller as another corporation or group of corporations.
970          (c) (i) "Arrangement" means an agreement between a noncollecting seller and a
971     referring seller, under which the referring seller, for a commission or other consideration,
972     directly or indirectly makes a referral to the noncollecting seller of a potential purchaser of
973     tangible personal property, a product transferred electronically, or a service.
974          (ii) "Arrangement" does not include any agreement under which a noncollecting seller
975     purchases advertising from a person in the state, unless the person in the state also directs a
976     solicitation toward one or more potential purchasers in the state.
977          (d) "Controlled group of corporations" means the same as that term is defined in
978     Section 1563(a), Internal Revenue Code.
979          (e) "Noncollecting seller" means a remote seller that:
980          (i) does not voluntarily collect and remit sales and use tax under this chapter; and
981          (ii) during the 12-month period immediately preceding the current month, makes sales
982     totaling $125,000 or more of tangible personal property, products transferred electronically, or
983     services:
984          (A) for storage, use, or consumption in the state; and
985          (B) as a result of an arrangement with one or more referring sellers.
986          (f) (i) "Online advertising" means advertising delivered through the Internet.

987          (ii) "Online advertising" includes:
988          (A) an email communication generated as a result of generic algorithmic functions if
989     the email communication does not target a specific person;
990          (B) an advertisement tied to an Internet search engine;
991          (C) a banner announcement;
992          (D) a cost-per-action advertisement; or
993          (E) an online advertising service similar to the online advertising described in
994     Subsections (1)(f)(ii)(A) through (D), as the commission may define by rule made in
995     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
996          (iii) "Online advertising" does not include an Internet-based link to a seller's website.
997          (g) (i) "Referral" means the act of sending a potential purchaser to a noncollecting
998     seller by:
999          (A) an Internet-based link;
1000          (B) an Internet website;
1001          (C) telemarketing;
1002          (D) in-person marketing; or
1003          (E) other means similar to the means described in Subsections (1)(g)(i)(A) through (D),
1004     as the commission may define by rule made in accordance with Title 63G, Chapter 3, Utah
1005     Administrative Rulemaking Act.
1006          (ii) "Referral" does not include online advertising.
1007          (h) "Referring seller" means a person:
1008          (i) that makes a sale of tangible personal property, a product transferred electronically,
1009     or a service;
1010          (ii) that meets one or more of the criteria described in Subsection (2)(a); and
1011          (iii) with which a noncollecting seller enters an arrangement.
1012          (i) "Remote seller" means a seller that is not required to pay or collect and remit sales
1013     and use taxes under Subsection (2)(a).
1014          (j) "Solicitation" means a communication directly or indirectly to a specific person
1015     within the state in a manner that is intended to and calculated to incite the person to purchase
1016     tangible personal property, a service, or a product transferred electronically from a specific
1017     seller.

1018          (2) (a) Except as provided in Subsection (2)[(e)](i), Section 59-12-107.1, or Section
1019     59-12-123, and subject to [Subsection (2)(f)] Subsections (2)(e) and (h), each seller shall pay or
1020     collect and remit the sales and use taxes imposed by this chapter if within this state the seller:
1021          (i) [has or] utilizes:
1022          (A) an office;
1023          (B) a distribution house;
1024          (C) a sales house;
1025          (D) a warehouse[;] or other storage place; or
1026          [(E) a service enterprise; or]
1027          [(F)] (E) a place of business similar to Subsections (2)(a)(i)(A) through [(E)] (D);
1028          (ii) maintains a stock of goods;
1029          (iii) regularly solicits orders, regardless of whether [or not] the orders are accepted in
1030     the state, unless the seller's only activity in the state is:
1031          (A) advertising; or
1032          (B) solicitation by:
1033          (I) direct mail;
1034          (II) electronic mail;
1035          (III) except as provided in Subsection (2)(d), the Internet;
1036          (IV) telecommunications service; or
1037          (V) a means similar to Subsection (2)(a)(iii)(A) or (B);
1038          (iv) regularly engages in the delivery of property in the state other than by:
1039          (A) common carrier; or
1040          (B) United States mail; or
1041          (v) regularly engages in an activity directly related to the leasing or servicing of
1042     property located within the state.
1043          (b) [A] There is a rebuttable presumption that a remote seller is [considered to be]
1044     engaged, in the state, in the business of selling tangible personal property, [a service, or] a
1045     product transferred electronically, or a service for storage, use [in the state], or consumption,
1046     and shall pay or collect and remit the sales and use taxes imposed by this chapter if:
1047          [(i) the seller holds a substantial ownership interest in, or is owned in whole or in
1048     substantial part by, a related seller; and]

1049          (i) a person who meets one or more of the criteria described in Subsection (2)(a) is an
1050     affiliate of the remote seller; or
1051          (ii) any person, other than a person acting in the capacity of a common carrier, that
1052     meets one or more of the criteria described in Subsection (2)(a):
1053          [(ii)] (A) [the seller] sells the same or a substantially similar line of products as the
1054     [related] seller and does so under the same or a substantially similar business name as the
1055     remote seller; [or]
1056          (B) [the] maintains a place of business described in Subsection (2)(a)(i) [of the related
1057     seller] or provides an [in state] in-state employee [of the related seller is used] to advertise,
1058     promote, deliver, or facilitate sales by the remote seller to a purchaser[.];
1059          (C) uses trademarks, service marks, or trade names in the state that are the same or
1060     substantially similar to those used by the remote seller;
1061          (D) delivers, installs, assembles, or performs maintenance service for the remote
1062     seller's purchaser within the state;
1063          (E) facilitates the remote seller's delivery of tangible personal property to a purchaser
1064     in the state by allowing the purchaser to pick up tangible personal property sold by the remote
1065     seller at an in-state office, distribution house, sales house, warehouse or other storage place, or
1066     similar place of business that is maintained by the person that meets one or more of the criteria
1067     described in Subsection (2)(a); or
1068          (F) conducts any other activity in the state that is significantly associated with the
1069     remote seller's ability to establish and maintain a market in the state for the remote seller's sales
1070     of tangible personal property, a product transferred electronically, or a service.
1071          (c) A remote seller may rebut the presumption described in Subsection (2)(b) by
1072     proving that the in-state activities of the person that meets one or more of the criteria described
1073     in Subsection (2)(a) are not significantly associated with the remote seller's ability to establish
1074     and maintain a market in the state for the seller's sales of tangible personal property, a service,
1075     or a product transferred electronically.
1076          (d) (i) (A) Subject to the other provisions of this Subsection (2)(d), there is a rebuttable
1077     presumption that a noncollecting seller is engaged, in the state, in the business of selling
1078     tangible personal property, a product transferred electronically, or a service, for storage, use, or
1079     consumption.

1080          (B) When the presumption arises, the noncollecting seller shall pay or collect and remit
1081     sales and use tax on any sale the noncollecting seller makes, through an arrangement, to a
1082     purchaser in the state.
1083          (ii) (A) The presumption described in Subsection (2)(d)(i) arises if the noncollecting
1084     seller makes sales in the state using a referring seller after January 1, 2017, regardless of the
1085     date when the noncollecting seller and the referring seller enter the arrangement and regardless
1086     of whether the 12-month period immediately preceding the current month includes any period
1087     of time that occurred before January 1, 2017.
1088          (B) If the presumption described in Subsection (2)(d)(i) arises, a noncollecting seller's
1089     obligation to collect and remit sales and use taxes begins on April 1, 2017.
1090          (iii) A noncollecting seller may rebut the presumption described in Subsection (2)(d)(i)
1091     by proving that a referring seller has not engaged in an activity within the state that is
1092     significantly associated with the noncollecting seller's ability, during the preceding 12 months,
1093     to establish and maintain a market within the state for the sale of tangible personal property, a
1094     product transferred electronically, or a service.
1095          (iv) (A) Proof to rebut the presumption described in Subsection (2)(d)(i) includes a
1096     written sworn statement from each referring seller that the referring seller did not engage in any
1097     solicitation of a potential purchaser in the state on behalf of the noncollecting seller for the sale
1098     of tangible personal property, a product transferred electronically, or a service.
1099          (B) A referring seller must make the written sworn statement described in Subsection
1100     (2)(d)(iv)(A) in good faith.
1101          (e) Unless the remote seller owns or leases the computer, a remote seller's use of a
1102     computer located in this state to create, maintain, or take an order through an Internet web
1103     page, an Internet website, an Internet post, an Internet listing, or an online marketplace may not
1104     be used as a factor in determining whether a remote seller is required to pay or collect and
1105     remit sales and use taxes under this Subsection (2).
1106          [(c) A] (f) (i) Except as provided in Subsection (2)(f)(ii), a remote seller [that does not
1107     meet one or more of the criteria provided for in Subsection (2)(a) or is not a seller required to
1108     pay or collect and remit sales and use taxes under Subsection (2)(b): (i) except as provided in
1109     Subsection (2)(c)(ii),] that is not subject to the presumption described in Subsection (2)(b) or
1110     (d) may voluntarily:

1111          (A) collect a tax on a transaction described in Subsection 59-12-103(1); and
1112          (B) remit the tax to the commission as provided in this part[; or].
1113          (ii) [notwithstanding Subsection (2)(c)(i),] A remote seller shall collect a tax on a
1114     transaction described in Subsection 59-12-103(1) if Section 59-12-103.1 requires the seller to
1115     collect the tax.
1116          [(d)] (g) The collection and remittance of a tax under this chapter by a seller that is
1117     registered under the agreement may not be used as a factor in determining whether that seller is
1118     required by Subsection (2) to:
1119          (i) pay a tax, fee, or charge under:
1120          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1121          (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
1122          (C) Section 19-6-714;
1123          (D) Section 19-6-805;
1124          (E) Section 69-2-5;
1125          (F) Section 69-2-5.5;
1126          (G) Section 69-2-5.6; or
1127          (H) this title; or
1128          (ii) collect and remit a tax, fee, or charge under:
1129          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1130          (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
1131          (C) Section 19-6-714;
1132          (D) Section 19-6-805;
1133          (E) Section 69-2-5;
1134          (F) Section 69-2-5.5;
1135          (G) Section 69-2-5.6; or
1136          (H) this title.
1137          [(e) A person shall pay a use tax imposed by this chapter on a transaction described in
1138     Subsection 59-12-103(1) if:]
1139          [(i) the seller did not collect a tax imposed by this chapter on the transaction; and]
1140          [(ii) the person:]
1141          [(A) stores the tangible personal property or product transferred electronically in the

1142     state;]
1143          [(B) uses the tangible personal property or product transferred electronically in the
1144     state; or]
1145          [(C) consumes the tangible personal property or product transferred electronically in
1146     the state.]
1147          [(f)] (h) The ownership of property that is located at the premises of a printer's facility
1148     with which the retailer has contracted for printing and that consists of the final printed product,
1149     property that becomes a part of the final printed product, or copy from which the printed
1150     product is produced, shall not result in the retailer being considered to have or maintain an
1151     office, distribution house, sales house, warehouse, service enterprise, or other place of
1152     business, or to maintain a stock of goods, within this state.
1153          (i) A person shall pay a use tax imposed by this chapter on a transaction described in
1154     Subsection 59-12-103(1) if:
1155          (i) the seller did not collect a tax imposed under this chapter on the transaction; and
1156          (ii) the person:
1157          (A) stores the tangible personal property or product transferred electronically in the
1158     state;
1159          (B) uses the tangible personal property or product transferred electronically in the state;
1160     or
1161          (C) consumes the tangible personal property or product transferred electronically in the
1162     state.
1163          (3) (a) Except as provided in Section 59-12-107.1, a seller shall collect a tax due under
1164     this chapter [shall be collected] from a purchaser.
1165          (b) A seller may not collect as a tax an amount, without regard to fractional parts of
1166     one cent, in excess of the tax computed at the rates prescribed by this chapter.
1167          (c) (i) Each seller shall:
1168          (A) give the purchaser a receipt for the tax collected; or
1169          (B) bill the tax as a separate item and declare the name of this state and the seller's
1170     sales and use tax license number on the invoice for the sale.
1171          (ii) The receipt or invoice is prima facie evidence that the seller has collected the tax
1172     and relieves the purchaser of the liability for reporting the tax to the commission as a

1173     consumer.
1174          (d) A seller is not required to maintain a separate account for the tax collected[,] but is
1175     considered to be a person charged with receipt, safekeeping, and transfer of public money.
1176          (e) Taxes collected by a seller pursuant to this chapter shall be held in trust for the
1177     benefit of the state and for payment to the commission in the manner and at the time provided
1178     for in this chapter.
1179          (f) If any seller, during any reporting period, collects as a tax an amount in excess of
1180     the lawful state and local percentage of total taxable sales allowed under this chapter, the seller
1181     shall remit to the commission the full amount of the tax imposed under this chapter, plus any
1182     excess.
1183          (g) If the accounting methods regularly employed by the seller in the transaction of the
1184     seller's business are such that reports of sales made during a calendar month or quarterly period
1185     will impose unnecessary hardships, the commission may accept reports at intervals that, in the
1186     commission's opinion, will[, in the commission's opinion,] better suit the convenience of the
1187     taxpayer or seller and will not jeopardize collection of the tax.
1188          (h) (i) For a purchase paid with specie legal tender as defined in Section 59-1-1501.1,
1189     and until such time as the commission accepts specie legal tender for the payment of a tax
1190     under this chapter, if the commission requires a seller to remit a tax under this chapter in legal
1191     tender other than specie legal tender, the seller shall state on the seller's books and records and
1192     on an invoice, bill of sale, or similar document provided to the purchaser:
1193          (A) the purchase price in specie legal tender and in the legal tender the seller is
1194     required to remit to the commission;
1195          (B) subject to Subsection (3)(h)(ii), the amount of tax due under this chapter in specie
1196     legal tender and in the legal tender the seller is required to remit to the commission;
1197          (C) the tax rate under this chapter applicable to the purchase; and
1198          (D) the date of the purchase.
1199          (ii) (A) Subject to Subsection (3)(h)(ii)(B), for purposes of determining the amount of
1200     tax due under Subsection (3)(h)(i), a seller shall use the most recent London fixing price for the
1201     specie legal tender the purchaser paid.
1202          (B) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1203     commission may make rules for determining the amount of tax due under Subsection (3)(h)(i)

1204     if the London fixing price is not available for a particular day.
1205          (4) (a) Except as provided in Subsections (5) through (7) and Section 59-12-108, the
1206     [sales or use] tax imposed by this chapter is due and payable to the commission quarterly on or
1207     before the last day of the month next succeeding each quarterly calendar [quarterly] period.
1208          (b) (i) Each seller shall, on or before the last day of the month next succeeding each
1209     quarterly calendar [quarterly] period, file with the commission a return for the preceding
1210     quarterly period.
1211          (ii) The seller shall remit with the return under Subsection (4)(b)(i) the amount of the
1212     tax required under this chapter to be collected or paid for the period covered by the return.
1213          (c) Except as provided in Subsection (5)(c), a return shall contain information and be in
1214     a form the commission prescribes by rule.
1215          (d) (i) Subject to Subsection (4)(d)(ii), the sales tax as computed in the return shall be
1216     based on the total nonexempt sales made during the period for which the return is filed,
1217     including both cash and charge sales.
1218          (ii) For a sale that includes the delivery or installation of tangible personal property at a
1219     location other than a seller's place of business described in Subsection (2)(a)(i), if the delivery
1220     or installation is separately stated on an invoice or receipt, a seller may compute the tax due [on
1221     the sale] for purposes of Subsection (4)(d)(i) based on the amount the seller receives for that
1222     sale during each period for which the seller receives payment for the sale.
1223          (e) (i) The use tax as computed in the return shall be based on the total amount of
1224     purchases for storage, use, or other consumption in this state made during the period for which
1225     the return is filed, including both cash and charge purchases.
1226          (ii) (A) As used in this Subsection (4)(e)(ii), "qualifying purchaser" means a purchaser
1227     who is required to remit taxes under this chapter[,] but is not required to remit taxes monthly in
1228     accordance with Section 59-12-108, and who converts tangible personal property into real
1229     property.
1230          (B) Subject to Subsections (4)(e)(ii)(C) and (D), a qualifying purchaser may remit the
1231     taxes due under this chapter on tangible personal property for which the qualifying purchaser
1232     claims an exemption as allowed under Subsection 59-12-104(23) or (25) based on the period in
1233     which the qualifying purchaser receives payment, in accordance with Subsection (4)(e)(ii)(C),
1234     for the conversion of the tangible personal property into real property.

1235          (C) A qualifying purchaser remitting taxes due under this chapter in accordance with
1236     Subsection (4)(e)(ii)(B) shall remit an amount equal to the total amount of tax due on the
1237     qualifying purchaser's purchase of the tangible personal property that was converted into real
1238     property multiplied by a fraction, the numerator of which is the payment received in the period
1239     for the qualifying purchaser's sale of the tangible personal property that was converted into real
1240     property and the denominator of which is the entire sales price for the qualifying purchaser's
1241     sale of the tangible personal property that was converted into real property.
1242          (D) A qualifying purchaser may remit taxes due under this chapter in accordance with
1243     this Subsection (4)(e)(ii) only if the books and records that the qualifying purchaser keeps in
1244     the qualifying purchaser's regular course of business identify by reasonable and verifiable
1245     standards that the tangible personal property was converted into real property.
1246          (f) (i) Subject to Subsection (4)(f)(ii) and in accordance with Title 63G, Chapter 3,
1247     Utah Administrative Rulemaking Act, the commission may by rule extend the time for making
1248     returns and paying the taxes.
1249          (ii) An extension under Subsection (4)(f)(i) may not be for more than 90 days.
1250          (g) The commission may require returns and payment of the tax to be made for other
1251     than quarterly periods if the commission considers it necessary in order to ensure the payment
1252     of the tax imposed by this chapter.
1253          (h) (i) The commission may require a seller that files a simplified electronic return with
1254     the commission to file an additional electronic report with the commission.
1255          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1256     commission may make rules providing:
1257          (A) the information required to be included in the additional electronic report described
1258     in Subsection (4)(h)(i); and
1259          (B) one or more due dates for filing the additional electronic report described in
1260     Subsection (4)(h)(i).
1261          (5) (a) As used in this Subsection (5) and Subsection (6)(b), ["remote seller"]
1262     "registered remitter" means a seller that is:
1263          (i) registered under the agreement;
1264          (ii) described in Subsection (2)(c); and
1265          (iii) not a:

1266          (A) model 1 seller;
1267          (B) model 2 seller; or
1268          (C) model 3 seller.
1269          (b) (i) Except as provided in Subsection (5)(b)(ii), a tax a [remote seller] registered
1270     remitter collects in accordance with Subsection (2)(c) is due and payable:
1271          (A) to the commission;
1272          (B) annually; and
1273          (C) on or before the last day of the month immediately following the last day of each
1274     calendar year.
1275          (ii) The commission may require that a tax a [remote seller] registered remitter collects
1276     in accordance with Subsection (2)(c) be due and payable:
1277          (A) to the commission; and
1278          (B) on the last day of the month immediately following any month in which the [seller]
1279     registered remitter accumulates a total of at least $1,000 in agreement sales and use tax.
1280          (c) (i) If a remote seller remits a tax to the commission in accordance with Subsection
1281     (5)(b), the [remote seller] registered remitter shall file a return:
1282          (A) with the commission;
1283          (B) with respect to the tax;
1284          (C) containing information prescribed by the commission; and
1285          (D) on a form prescribed by the commission.
1286          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1287     commission shall make rules prescribing:
1288          (A) the information required to be contained in a return described in Subsection
1289     (5)(c)(i); and
1290          (B) the form described in Subsection (5)(c)(i)(D).
1291          (d) A tax a [remote seller] registered remitter collects in accordance with this
1292     Subsection (5) shall be calculated on the basis of the total amount of taxable transactions under
1293     Subsection 59-12-103(1) the [remote seller] registered remitter completes, including[:] cash
1294     transactions and charge transactions.
1295          [(i) a cash transaction; and]
1296          [(ii) a charge transaction.]

1297          (6) (a) Except as provided in Subsection (6)(b), a tax a seller that files a simplified
1298     electronic return collects in accordance with this chapter is due and payable:
1299          (i) monthly on or before the last day of the month immediately following the month for
1300     which the seller collects a tax under this chapter; and
1301          (ii) for the month for which the seller collects a tax under this chapter.
1302          (b) A tax a remote seller that files a simplified electronic return collects in accordance
1303     with this chapter is due and payable as provided in Subsection (5).
1304          (7) (a) On each vehicle sale made by other than a regular licensed vehicle dealer, the
1305     purchaser shall pay the sales or use tax directly to the commission if the vehicle is subject to
1306     titling or registration under the laws of this state.
1307          (b) The commission shall collect the tax described in Subsection (7)(a) when the
1308     vehicle is titled or registered.
1309          (8) If any sale of tangible personal property or any other taxable transaction under
1310     Subsection 59-12-103(1), is made by a wholesaler to a retailer[,]:
1311          (a) the wholesaler is not responsible for the collection or payment of the tax imposed
1312     on the sale; and
1313          (b) the retailer is responsible for the collection or payment of the tax imposed on the
1314     sale if:
1315          [(a)] (i) the retailer represents that the tangible personal property, product transferred
1316     electronically, or service is purchased by the retailer for resale; and
1317          [(b)] (ii) the tangible personal property, product transferred electronically, or service is
1318     not subsequently resold.
1319          (9) If any sale of property or service subject to the tax is made to a person prepaying
1320     sales or use tax in accordance with Title 63M, Chapter 5, Resource Development Act, or to a
1321     contractor or subcontractor of that person[,];
1322          (a) the person to whom such payment or consideration is payable is not responsible for
1323     the collection or payment of the sales or use tax; and
1324          (b) the person prepaying the sales or use tax is responsible for the collection or
1325     payment of the sales or use tax if the person prepaying the sales or use tax represents that the
1326     amount prepaid as sales or use tax has not been fully credited against sales or use tax due and
1327     payable under the rules promulgated by the commission.

1328          (10) (a) For purposes of this Subsection (10):
1329          (i) Except as provided in Subsection (10)(a)(ii), "bad debt" [is as] means the same as
1330     that term is defined in Section 166, Internal Revenue Code.
1331          (ii) [Notwithstanding Subsection (10)(a)(i), "bad] "Bad debt" does not include:
1332          (A) an amount included in the purchase price of tangible personal property, a product
1333     transferred electronically, or a service that is:
1334          (I) not a transaction described in Subsection 59-12-103(1); or
1335          (II) exempt under Section 59-12-104;
1336          (B) a financing charge;
1337          (C) interest;
1338          (D) a tax imposed under this chapter on the purchase price of tangible personal
1339     property, a product transferred electronically, or a service;
1340          (E) an uncollectible amount on tangible personal property or a product transferred
1341     electronically that:
1342          (I) is subject to a tax under this chapter; and
1343          (II) remains in the possession of a seller until the full purchase price is paid;
1344          (F) an expense incurred in attempting to collect any debt; or
1345          (G) an amount that a seller does not collect on repossessed property.
1346          (b) (i) To the extent an amount remitted in accordance with Subsection (4)(d) later
1347     becomes bad debt, a seller may deduct the bad debt from the total amount from which a tax
1348     under this chapter is calculated on a return.
1349          (ii) A qualifying purchaser, as defined in Subsection (4)(e)(ii)(A), may deduct from the
1350     total amount of taxes due under this chapter the amount of tax the qualifying purchaser paid on
1351     the qualifying purchaser's purchase of tangible personal property converted into real property to
1352     the extent that:
1353          (A) tax was remitted in accordance with Subsection (4)(e) on that tangible personal
1354     property converted into real property;
1355          (B) the qualifying purchaser's sale of that tangible personal property converted into real
1356     property later becomes bad debt; and
1357          (C) the books and records that the qualifying purchaser keeps in the qualifying
1358     purchaser's regular course of business identify by reasonable and verifiable standards that the

1359     tangible personal property was converted into real property.
1360          (c) A seller may file a refund claim with the commission if:
1361          (i) the amount of bad debt for the time period described in Subsection (10)(e) exceeds
1362     the amount of the seller's sales that are subject to a tax under this chapter for that same time
1363     period; and
1364          (ii) as provided in Section 59-1-1410.
1365          (d) A bad debt deduction under this section may not include interest.
1366          (e) A bad debt may be deducted under this Subsection (10) on a return for the time
1367     period during which the bad debt:
1368          (i) is written off as uncollectible in the seller's books and records; and
1369          (ii) would be eligible for a bad debt deduction:
1370          (A) for federal income tax purposes; and
1371          (B) if the seller were required to file a federal income tax return.
1372          (f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
1373     claims a refund under this Subsection (10), the seller shall report and remit a tax under this
1374     chapter:
1375          (i) on the portion of the bad debt the seller recovers; and
1376          (ii) on a return filed for the time period for which the portion of the bad debt is
1377     recovered.
1378          (g) For purposes of reporting a recovery of a portion of bad debt under Subsection
1379     (10)(f), a seller shall apply amounts received on the bad debt in the following order:
1380          (i) in a proportional amount:
1381          (A) to the purchase price of the tangible personal property, product transferred
1382     electronically, or service; and
1383          (B) to the tax due under this chapter on the tangible personal property, product
1384     transferred electronically, or service; and
1385          (ii) to:
1386          (A) interest charges;
1387          (B) service charges; and
1388          (C) other charges.
1389          (h) A seller's certified service provider may make a deduction or claim a refund for bad

1390     debt on behalf of the seller:
1391          (i) in accordance with this Subsection (10); and
1392          (ii) if the certified service provider credits or refunds the entire amount of the bad debt
1393     deduction or refund to the seller.
1394          (i) A seller may allocate bad debt among the states that are members of the agreement
1395     if the seller's books and records support that allocation.
1396          (11) (a) A seller may not, with intent to evade any tax, fail to timely remit the full
1397     amount of tax required by this chapter.
1398          (b) A violation of this section is punishable as provided in Section 59-1-401.
1399          (c) Each person who fails to pay any tax to the state or any amount of tax required to be
1400     paid to the state, except amounts determined to be due by the commission under Chapter 1,
1401     Part 14, Assessment, Collections, and Refunds Act, or Section 59-12-111, within the time
1402     required by this chapter, or who fails to file any return as required by this chapter, shall pay, in
1403     addition to the tax, penalties and interest as provided in Sections 59-1-401 and 59-1-402.
1404          (d) For purposes of prosecution under this section, each quarterly tax period in which a
1405     seller, with intent to evade any tax, collects a tax and fails to timely remit the full amount of the
1406     tax required to be remitted, constitutes a separate offense.
1407          (12) The provisions of this section are severable. If any provision of this section or the
1408     application of any provision of this section to any person or circumstance is held invalid by a
1409     final, unappealable decision of a court of competent jurisdiction, the remainder of this section
1410     shall be given effect without the invalid provision or application.
1411          Section 6. Section 59-12-108 is amended to read:
1412          59-12-108. Monthly payment -- Amount of tax a seller may retain -- Penalty --
1413     Certain amounts allocated to local taxing jurisdictions.
1414          (1) (a) Notwithstanding Section 59-12-107, a seller that has a tax liability under this
1415     chapter of $50,000 or more for the previous calendar year shall:
1416          (i) file a return with the commission:
1417          (A) monthly on or before the last day of the month immediately following the month
1418     for which the seller collects a tax under this chapter; and
1419          (B) for the month for which the seller collects a tax under this chapter; and
1420          (ii) except as provided in Subsection (1)(b), remit, with the return required by

1421     Subsection (1)(a)(i), the amount [the person is required to remit to the commission for each tax,
1422     fee, or charge] described in Subsection (1)(c) as follows:
1423          (A) if that seller's tax liability under this chapter for the previous calendar year is less
1424     than $96,000, by any method permitted by the commission; or
1425          (B) if that seller's tax liability under this chapter for the previous calendar year is
1426     $96,000 or more, by electronic funds transfer.
1427          (b) A seller shall remit electronically with the return required by Subsection (1)(a)(i)
1428     the amount the seller is required to remit to the commission for each tax, fee, or charge
1429     described in Subsection (1)(c) if that seller:
1430          (i) is required by Section 59-12-107 to file the return electronically; or
1431          (ii) (A) is required to collect and remit a tax under Section 59-12-107; and
1432          (B) files a simplified electronic return.
1433          (c) Subsections (1)(a) and (b) apply to the following taxes, fees, or charges:
1434          (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1435          (ii) a fee under Section 19-6-714;
1436          (iii) a fee under Section 19-6-805;
1437          (iv) a charge under Section 69-2-5;
1438          (v) a charge under Section 69-2-5.5;
1439          (vi) a charge under Section 69-2-5.6; [or] and
1440          (vii) a tax under this chapter.
1441          (d) Notwithstanding [Subsection] Subsections (1)(a)(ii) and (b) and in accordance with
1442     Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the commission shall make rules
1443     providing for a method for making same-day payments other than by electronic funds transfer
1444     if making payments by electronic funds transfer fails.
1445          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1446     commission shall establish by rule procedures and requirements for determining the amount a
1447     seller is required to remit to the commission under this Subsection (1).
1448          (2) (a) Except as provided in Subsection (3), a seller subject to Subsection (1) or a
1449     seller described in Subsection (4) may retain each month the amount allowed by this
1450     Subsection (2).
1451          (b) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain

1452     each month 1.31% of any amounts the seller is required to remit to the commission:
1453          (i) for a transaction described in Subsection 59-12-103(1) that is subject to a state tax
1454     and a local tax imposed in accordance with the following, for the month for which the seller is
1455     filing a return in accordance with Subsection (1):
1456          (A) Subsection 59-12-103(2)(a);
1457          (B) Subsection 59-12-103(2)(b); and
1458          (C) Subsection 59-12-103(2)(d); and
1459          (ii) for an agreement sales and use tax.
1460          (c) (i) A seller subject to Subsection (1) or a seller described in Subsection (4) may
1461     retain each month the amount calculated under Subsection (2)(c)(ii) for a transaction described
1462     in Subsection 59-12-103(1) that is subject to the state tax and the local tax imposed in
1463     accordance with Subsection 59-12-103(2)(c).
1464          (ii) For purposes of Subsection (2)(c)(i), the amount a seller may retain is an amount
1465     equal to the sum of:
1466          (A) 1.31% of any amounts the seller is required to remit to the commission for:
1467          (I) the state tax and the local tax imposed in accordance with Subsection
1468     59-12-103(2)(c);
1469          (II) the month for which the seller is filing a return in accordance with Subsection (1);
1470     and
1471          (III) an agreement sales and use tax; and
1472          (B) 1.31% of the difference between:
1473          (I) the amounts the seller would have been required to remit to the commission:
1474          (Aa) in accordance with Subsection 59-12-103(2)(a) if the transaction had been subject
1475     to the state tax and the local tax imposed in accordance with Subsection 59-12-103(2)(a);
1476          (Bb) for the month for which the seller is filing a return in accordance with Subsection
1477     (1); and
1478          (Cc) for an agreement sales and use tax; and
1479          (II) the amounts the seller is required to remit to the commission for:
1480          (Aa) the state tax and the local tax imposed in accordance with Subsection
1481     59-12-103(2)(c);
1482          (Bb) the month for which the seller is filing a return in accordance with Subsection (1);

1483     and
1484          (Cc) an agreement sales and use tax.
1485          (d) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain
1486     each month 1% of any amounts the seller is required to remit to the commission:
1487          (i) for the month for which the seller is filing a return in accordance with Subsection
1488     (1); and
1489          (ii) under:
1490          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1491          (B) Subsection 59-12-603(1)(a)(i)(A); or
1492          (C) Subsection 59-12-603(1)(a)(i)(B).
1493          (3) A state government entity that is required to remit taxes monthly in accordance
1494     with Subsection (1) may not retain any amount under Subsection (2).
1495          (4) A seller that has a tax liability under this chapter for the previous calendar year of
1496     less than $50,000 may:
1497          (a) voluntarily meet the requirements of Subsection (1); and
1498          (b) if the seller voluntarily meets the requirements of Subsection (1), retain the
1499     amounts allowed by Subsection (2).
1500          (5) (a) Subject to Subsections (5)(b) through (d), a seller that voluntarily collects and
1501     remits a tax in accordance with Subsection 59-12-107(2)[(c)](f)(i) may retain an amount equal
1502     to 18% of any amounts the seller would otherwise remit to the commission:
1503          (i) if the seller obtains a license under Section 59-12-106 for the first time on or after
1504     January 1, 2014; and
1505          (ii) for:
1506          (A) an agreement sales and use tax; and
1507          (B) the time period for which the seller files a return in accordance with this section.
1508          (b) If a seller retains an amount under this Subsection (5), the seller may not retain any
1509     other amount under this section.
1510          (c) If a seller retains an amount under this Subsection (5), the commission may require
1511     the seller to file a return by:
1512          (i) electronic means; or
1513          (ii) a means other than electronic means.

1514          (d) A seller may not retain an amount under this Subsection (5) if the seller is required
1515     to collect or remit a tax under this section in accordance with Section 59-12-103.1.
1516          (6) Penalties for late payment shall be as provided in Section 59-1-401.
1517          (7) (a) Except as provided in Subsection (7)(c), for any amounts required to be remitted
1518     to the commission under this part, the commission shall each month calculate an amount equal
1519     to the difference between:
1520          (i) the total amount retained for that month by all sellers had the percentages listed
1521     under Subsections (2)(b) and (2)(c)(ii) been 1.5%; and
1522          (ii) the total amount retained for that month by all sellers at the percentages listed
1523     under Subsections (2)(b) and (2)(c)(ii).
1524          (b) The commission shall each month allocate the amount calculated under Subsection
1525     (7)(a) to each county, city, and town on the basis of the proportion of agreement sales and use
1526     tax that the commission distributes to each county, city, and town for that month compared to
1527     the total agreement sales and use tax that the commission distributes for that month to all
1528     counties, cities, and towns.
1529          (c) The amount the commission calculates under Subsection (7)(a) may not include an
1530     amount collected from a tax that:
1531          (i) the state imposes within a county, city, or town, including the unincorporated area
1532     of a county; and
1533          (ii) is not imposed within the entire state.
1534          Section 7. Section 59-12-211 is amended to read:
1535          59-12-211. Definitions -- Location of certain transactions -- Reports to
1536     commission -- Direct payment provision for a seller making certain purchases --
1537     Exceptions.
1538          (1) As used in this section:
1539          (a) (i) "Receipt" and "receive" mean:
1540          (A) taking possession of tangible personal property;
1541          (B) making first use of a service; or
1542          (C) for a product transferred electronically, the earlier of:
1543          (I) taking possession of the product transferred electronically; or
1544          (II) making first use of the product transferred electronically.

1545          (ii) "Receipt" and "receive" do not include possession by a shipping company on behalf
1546     of a purchaser.
1547          (b) "Transportation equipment" means:
1548          (i) a locomotive or rail car that is used to carry a person or property in interstate
1549     commerce;
1550          (ii) a truck or truck-tractor:
1551          (A) with a gross vehicle weight rating of 10,001 pounds or [more] greater;
1552          (B) registered under Section 41-1a-301; and
1553          (C) operated under the authority of a carrier authorized and certificated:
1554          (I) by the United States Department of Transportation or another federal authority; and
1555          (II) to engage in carrying a person or property in interstate commerce;
1556          (iii) a trailer, semitrailer, or passenger bus that is:
1557          (A) registered under Section 41-1a-301; and
1558          (B) operated under the authority of a carrier authorized and certificated:
1559          (I) by the United States Department of Transportation or another federal authority; and
1560          (II) to engage in carrying a person or property in interstate commerce;
1561          (iv) an aircraft that is operated by an air carrier authorized and certificated:
1562          (A) by the United States Department of Transportation or another federal or foreign
1563     authority; and
1564          (B) to engage in carrying a person or property in interstate commerce; or
1565          (v) a container designed for use on, or a component part attached or secured on, an
1566     item of equipment listed in Subsections (1)(b)(i) through (iv).
1567          (2) Except as provided in Subsections (8) and (14), if tangible personal property, a
1568     product transferred electronically, or a service that is subject to taxation under this chapter is
1569     received by a purchaser at a business location of a seller, the location of the transaction is the
1570     business location of the seller.
1571          (3) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9), (11),
1572     and (14), if tangible personal property, a product transferred electronically, or a service that is
1573     subject to taxation under this chapter is not received by a purchaser at a business location of a
1574     seller, the location of the transaction is the location where the purchaser takes receipt of the
1575     tangible personal property or service.

1576          (4) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9), (11),
1577     and (14), if Subsection (2) or (3) does not apply, the location of the transaction is the location
1578     indicated by an address for or other information on the purchaser if:
1579          (a) the address or other information is available from the seller's business records; and
1580          (b) use of the address or other information from the seller's records does not constitute
1581     bad faith.
1582          (5) (a) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9),
1583     (11), and (14), if Subsection (2), (3), or (4) does not apply, the location of the transaction is the
1584     location indicated by an address for the purchaser if:
1585          (i) the address is obtained during the consummation of the transaction; and
1586          (ii) use of the address described in Subsection (5)(a)(i) does not constitute bad faith.
1587          (b) An address used under Subsection (5)(a) includes the address of a purchaser's
1588     payment instrument if no other address is available.
1589          (6) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9), (11),
1590     and (14), if Subsection (2), (3), (4), or (5) does not apply or if a seller does not have sufficient
1591     information to apply Subsection (2), (3), (4), or (5), the location of the transaction is the
1592     location:
1593          (a) indicated by the address from which:
1594          (i) except as provided in Subsection (6)(a)(ii), for tangible personal property that is
1595     subject to taxation under this chapter, the tangible personal property is shipped;
1596          (ii) for computer software delivered electronically or for a product transferred
1597     electronically that is subject to taxation under this chapter, the computer software or product
1598     transferred electronically is first available for transmission by the seller; or
1599          (iii) for a service that is subject to taxation under this chapter, the service is provided;
1600     or
1601          (b) as determined by the seller with respect to a prepaid wireless calling service:
1602          (i) provided in Subsection (6)(a)(iii); or
1603          (ii) associated with the mobile telephone number.
1604          (7) (a) For purposes of this Subsection (7), "shared ZIP Code" means a nine-digit ZIP
1605     Code that is located within two or more local taxing jurisdictions.
1606          (b) If the location of a transaction determined under Subsections (3) through (6) is in a

1607     shared ZIP Code, the location of the transaction is:
1608          (i) if there is only one local taxing jurisdiction that imposes the lowest agreement
1609     combined tax rate for the shared ZIP Code, the local taxing jurisdiction that imposes the lowest
1610     agreement combined tax rate; or
1611          (ii) if two or more local taxing jurisdictions impose the lowest agreement combined tax
1612     rate for the shared ZIP Code, the local taxing jurisdiction that:
1613          (A) imposes the lowest agreement combined tax rate for the shared ZIP Code; and
1614          (B) has located within the local taxing jurisdiction the largest number of street
1615     addresses within the shared ZIP Code.
1616          (c) Notwithstanding any provision under this chapter authorizing or requiring the
1617     imposition of a sales and use tax, for purposes of Subsection (7)(b), a seller shall collect a sales
1618     and use tax imposed under this chapter at the lowest agreement combined tax rate imposed
1619     within the local taxing jurisdiction in which the transaction is located under Subsection (7)(b).
1620          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1621     commission may make rules:
1622          (i) providing for the circumstances under which a seller has exercised due diligence in
1623     determining the nine-digit ZIP Code for an address; or
1624          (ii) notwithstanding Subsection (7)(b), for determining the local taxing jurisdiction
1625     within which a transaction is located if a seller is unable to determine the local taxing
1626     jurisdiction within which the transaction is located under Subsection (7)(b).
1627          (8) The location of a transaction made with a direct payment permit described in
1628     Section 59-12-107.1 is the location where receipt of the tangible personal property, product
1629     transferred electronically, or service by the purchaser occurs.
1630          (9) The location of a purchase of direct mail is the location determined in accordance
1631     with Section 59-12-123.
1632          (10) (a) Except as provided in Subsection (10)(b), the location of a transaction
1633     determined under Subsections (3) through (6), (8), or (9), is the local taxing jurisdiction within
1634     which:
1635          (i) the nine-digit ZIP Code assigned to the location determined under Subsections (3)
1636     through (6), (8), or (9) is located; or
1637          (ii) the five-digit ZIP Code assigned to the location determined under Subsections (3)

1638     through (6), (8), or (9) is located if:
1639          (A) a nine-digit ZIP Code is not available for the location determined under
1640     Subsections (3) through (6), (8), or (9); or
1641          (B) after exercising due diligence, a seller or certified service provider is unable to
1642     determine a nine-digit ZIP Code for the location determined under Subsections (3) through (6),
1643     (8), or (9).
1644          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1645     commission may make rules for determining the local taxing jurisdiction within which a
1646     transaction is located if a seller or certified service provider is unable to determine the local
1647     taxing jurisdiction within which the transaction is located under Subsection (10)(a).
1648          (11) (a) As used in this Subsection (11), "florist delivery transaction" means a
1649     transaction commenced by a florist that transmits an order:
1650          (i) by:
1651          (A) telegraph;
1652          (B) telephone; or
1653          (C) a means of communication similar to Subsection (11)(a)(i)(A) or (B); and
1654          (ii) for delivery to another place:
1655          (A) in this state; or
1656          (B) outside this state.
1657          [(b) Notwithstanding Subsections (3) through (6), beginning on January 1, 2009, and
1658     ending on December 31, 2009, the location of a florist delivery transaction is the business
1659     location of the florist that commences the florist delivery transaction.]
1660          [(c)] (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
1661     Act, the commission may by rule:
1662          (i) define:
1663          (A) "business location"; and
1664          (B) "florist";
1665          (ii) define what constitutes a means of communication similar to Subsection
1666     (11)(a)(i)(A) or (B); and
1667          (iii) provide procedures for determining when a transaction is commenced.
1668          (12) (a) Notwithstanding any other provision of this section and except as provided in

1669     Subsection (12)(b), if a purchaser uses computer software and there is not a transfer of a copy
1670     of that software to the purchaser, the location of the transaction is determined in accordance
1671     with Subsections (4) and (5).
1672          (b) If a purchaser uses computer software described in Subsection (12)(a) at more than
1673     one location, the location of the transaction shall be determined in accordance with rules made
1674     by the commission in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
1675     Act.
1676          (13) (a) A tax collected under this chapter shall be reported to the commission on a
1677     form that identifies the location of each transaction that occurs during the return filing period.
1678          (b) The form described in Subsection (13)(a) shall be filed with the commission as
1679     required under this chapter.
1680          (14) This section does not apply to:
1681          (a) amounts charged by a seller for:
1682          (i) telecommunications service except for a prepaid calling service or a prepaid
1683     wireless calling service as provided in Subsection (6)(b) or Section 59-12-215; or
1684          (ii) the retail sale or transfer of:
1685          (A) a motor vehicle other than a motor vehicle that is transportation equipment;
1686          (B) an aircraft other than an aircraft that is transportation equipment;
1687          (C) a watercraft;
1688          (D) a modular home;
1689          (E) a manufactured home; or
1690          (F) a mobile home; or
1691          (iii) except as provided in Section 59-12-214, the lease or rental of tangible personal
1692     property other than tangible personal property that is transportation equipment;
1693          (b) a tax a person pays in accordance with Subsection 59-12-107(2)[(e)](h); or
1694          (c) a retail sale of tangible personal property or a product transferred electronically if:
1695          (i) the seller receives the order for the tangible personal property or product transferred
1696     electronically in this state;
1697          (ii) receipt of the tangible personal property or product transferred electronically by the
1698     purchaser or the purchaser's donee occurs in this state;
1699          (iii) the location where receipt of the tangible personal property or product transferred

1700     electronically by the purchaser occurs is determined in accordance with Subsections (3)
1701     through (5); and
1702          (iv) at the time the seller receives the order, the record keeping system that the seller
1703     uses to calculate the proper amount of tax imposed under this chapter captures the location
1704     where the order is received.
1705          Section 8. Section 59-12-211.1 is amended to read:
1706          59-12-211.1. Location of a transaction that is subject to a use tax.
1707          (1) Subject to Subsection (2), a person that is required by Subsection
1708     59-12-107(2)[(e)](i) to pay a use tax on a transaction shall report the location of that transaction
1709     at the person's location.
1710          (2) For purposes of Subsection (1), if a person has more than one location in this state,
1711     the person shall report the location of the transaction at the location at which tangible personal
1712     property, a product transferred electronically, or a service is received.
1713          Section 9. Section 76-8-1101 is amended to read:
1714          76-8-1101. Criminal offenses and penalties relating to revenue and taxation --
1715     Rulemaking authority -- Statute of limitations.
1716          (1) (a) As provided in Section 59-1-401, criminal offenses and penalties are as
1717     provided in Subsections (1)(b) through (e).
1718          (b) (i) [Any] A person [who] is guilty of a class B misdemeanor if the person:
1719          (A) is required by Title 59, Revenue and Taxation, or any laws the State Tax
1720     Commission administers or regulates, to register with or obtain a license or permit from the
1721     State Tax Commission[, who]; and
1722          (B) operates without having registered or secured a license or permit[,] or [who]
1723     operates when the registration, license, or permit is expired or not current[, is guilty of a class
1724     B misdemeanor].
1725          (ii) Notwithstanding Section 76-3-301, for purposes of Subsection (1)(b)(i), the
1726     penalty may not:
1727          (A) be less than $500; or
1728          (B) exceed $1,000.
1729          (c) (i) With respect to a tax, fee, or charge as defined in Section 59-1-401, [any] a
1730     person [who] is guilty of a third degree felony if the person:

1731          (A) knowingly and intentionally, and without a reasonable good faith basis, fails to
1732     make, render, sign, or verify any return within the time required by law or to supply any
1733     information within the time required by law[, or who];
1734          (B) makes, renders, signs, or verifies any false or fraudulent return or statement[,]; or
1735     [who]
1736          (C) supplies any false or fraudulent information[, is guilty of a third degree felony].
1737          (ii) Notwithstanding Section 76-3-301, for purposes of Subsection (1)(c)(i), the penalty
1738     may not:
1739          (A) be less than $1,000; or
1740          (B) exceed $5,000.
1741          (d) (i) Any person who intentionally or willfully attempts to evade or defeat any tax,
1742     fee, or charge as defined in Section 59-1-401 or the payment of a tax, fee, or charge as defined
1743     in Section 59-1-401 is, in addition to other penalties provided by law, guilty of a second degree
1744     felony.
1745          (ii) Notwithstanding Section 76-3-301, for purposes of Subsection (1)(d)(i), the penalty
1746     may not:
1747          (A) be less than $1,500; or
1748          (B) exceed $25,000.
1749          (e) (i) A person is guilty of a second degree felony if that person commits an act:
1750          (A) described in Subsection (1)(e)(ii) with respect to one or more of the following
1751     documents:
1752          (I) a return;
1753          (II) an affidavit;
1754          (III) a claim; or
1755          (IV) a document similar to Subsections (1)(e)(i)(A)(I) through (III); and
1756          (B) subject to Subsection (1)(e)(iii), with knowledge that the document described in
1757     Subsection (1)(e)(i)(A):
1758          (I) is false or fraudulent as to any material matter; and
1759          (II) could be used in connection with any material matter administered by the State Tax
1760     Commission.
1761          (ii) The following acts apply to Subsection (1)(e)(i):

1762          (A) preparing any portion of a document described in Subsection (1)(e)(i)(A);
1763          (B) presenting any portion of a document described in Subsection (1)(e)(i)(A);
1764          (C) procuring any portion of a document described in Subsection (1)(e)(i)(A);
1765          (D) advising in the preparation or presentation of any portion of a document described
1766     in Subsection (1)(e)(i)(A);
1767          (E) aiding in the preparation or presentation of any portion of a document described in
1768     Subsection (1)(e)(i)(A);
1769          (F) assisting in the preparation or presentation of any portion of a document described
1770     in Subsection (1)(e)(i)(A); or
1771          (G) counseling in the preparation or presentation of any portion of a document
1772     described in Subsection (1)(e)(i)(A).
1773          (iii) This Subsection (1)(e) applies:
1774          (A) regardless of whether the person for which the document described in Subsection
1775     (1)(e)(i)(A) is prepared or presented:
1776          (I) knew of the falsity of the document described in Subsection (1)(e)(i)(A); or
1777          (II) consented to the falsity of the document described in Subsection (1)(e)(i)(A); and
1778          (B) in addition to any other penalty provided by law.
1779          (iv) Notwithstanding Section 76-3-301, for purposes of this Subsection (1)(e), the
1780     penalty may not:
1781          (A) be less than $1,500; or
1782          (B) exceed $25,000.
1783          (v) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1784     State Tax Commission may make rules prescribing the documents that are similar to
1785     Subsections (1)(e)(i)(A)(I) through (III).
1786          (2) The statute of limitations for prosecution for a violation of this section is the later
1787     of six years:
1788          (a) from the date the tax should have been remitted; or
1789          (b) after the day on which the person commits the criminal offense.
1790          Section 10. Effective date.
1791          This bill takes effect on January 1, 2017.