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7 LONG TITLE
8 General Description:
9 This bill modifies provisions related to taxation of solar energy machinery, equipment,
10 parts, and materials.
11 Highlighted Provisions:
12 This bill:
13 ▸ creates a sales and use tax exemption for solar energy machinery, equipment, parts,
14 and materials under certain circumstances.
15 Money Appropriated in this Bill:
16 None
17 Other Special Clauses:
18 None
19 Utah Code Sections Affected:
20 AMENDS:
21 59-12-104, as last amended by Laws of Utah 2015, Chapters 11, 294, and 353
22
23 Be it enacted by the Legislature of the state of Utah:
24 Section 1. Section 59-12-104 is amended to read:
25 59-12-104. Exemptions.
26 Exemptions from the taxes imposed by this chapter are as follows:
27 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
28 under Chapter 13, Motor and Special Fuel Tax Act;
29 (2) subject to Section 59-12-104.6, sales to the state, its institutions, and its political
30 subdivisions; however, this exemption does not apply to sales of:
31 (a) construction materials except:
32 (i) construction materials purchased by or on behalf of institutions of the public
33 education system as defined in Utah Constitution, Article X, Section 2, provided the
34 construction materials are clearly identified and segregated and installed or converted to real
35 property which is owned by institutions of the public education system; and
36 (ii) construction materials purchased by the state, its institutions, or its political
37 subdivisions which are installed or converted to real property by employees of the state, its
38 institutions, or its political subdivisions; or
39 (b) tangible personal property in connection with the construction, operation,
40 maintenance, repair, or replacement of a project, as defined in Section 11-13-103, or facilities
41 providing additional project capacity, as defined in Section 11-13-103;
42 (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
43 (i) the proceeds of each sale do not exceed $1; and
44 (ii) the seller or operator of the vending machine reports an amount equal to 150% of
45 the cost of the item described in Subsection (3)(b) as goods consumed; and
46 (b) Subsection (3)(a) applies to:
47 (i) food and food ingredients; or
48 (ii) prepared food;
49 (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
50 (i) alcoholic beverages;
51 (ii) food and food ingredients; or
52 (iii) prepared food;
53 (b) sales of tangible personal property or a product transferred electronically:
54 (i) to a passenger;
55 (ii) by a commercial airline carrier; and
56 (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
57 (c) services related to Subsection (4)(a) or (b);
58 (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
59 and equipment:
60 (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
61 North American Industry Classification System of the federal Executive Office of the
62 President, Office of Management and Budget; and
63 (II) for:
64 (Aa) installation in an aircraft, including services relating to the installation of parts or
65 equipment in the aircraft;
66 (Bb) renovation of an aircraft; or
67 (Cc) repair of an aircraft; or
68 (B) for installation in an aircraft operated by a common carrier in interstate or foreign
69 commerce; or
70 (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
71 aircraft operated by a common carrier in interstate or foreign commerce; and
72 (b) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund,
73 a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
74 refund:
75 (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
76 (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
77 (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
78 the sale prior to filing for the refund;
79 (iv) for sales and use taxes paid under this chapter on the sale;
80 (v) in accordance with Section 59-1-1410; and
81 (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410, if
82 the person files for the refund on or before September 30, 2011;
83 (6) sales of commercials, motion picture films, prerecorded audio program tapes or
84 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
85 exhibitor, distributor, or commercial television or radio broadcaster;
86 (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
87 property if the cleaning or washing of the tangible personal property is not assisted cleaning or
88 washing of tangible personal property;
89 (b) if a seller that sells at the same business location assisted cleaning or washing of
90 tangible personal property and cleaning or washing of tangible personal property that is not
91 assisted cleaning or washing of tangible personal property, the exemption described in
92 Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
93 or washing of the tangible personal property; and
94 (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
95 Utah Administrative Rulemaking Act, the commission may make rules:
96 (i) governing the circumstances under which sales are at the same business location;
97 and
98 (ii) establishing the procedures and requirements for a seller to separately account for
99 sales of assisted cleaning or washing of tangible personal property;
100 (8) sales made to or by religious or charitable institutions in the conduct of their regular
101 religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
102 fulfilled;
103 (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
104 this state if the vehicle is:
105 (a) not registered in this state; and
106 (b) (i) not used in this state; or
107 (ii) used in this state:
108 (A) if the vehicle is not used to conduct business, for a time period that does not
109 exceed the longer of:
110 (I) 30 days in any calendar year; or
111 (II) the time period necessary to transport the vehicle to the borders of this state; or
112 (B) if the vehicle is used to conduct business, for the time period necessary to transport
113 the vehicle to the borders of this state;
114 (10) (a) amounts paid for an item described in Subsection (10)(b) if:
115 (i) the item is intended for human use; and
116 (ii) (A) a prescription was issued for the item; or
117 (B) the item was purchased by a hospital or other medical facility; and
118 (b) (i) Subsection (10)(a) applies to:
119 (A) a drug;
120 (B) a syringe; or
121 (C) a stoma supply; and
122 (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
123 commission may by rule define the terms:
124 (A) "syringe"; or
125 (B) "stoma supply";
126 (11) purchases or leases exempt under Section 19-12-201;
127 (12) (a) sales of an item described in Subsection (12)(c) served by:
128 (i) the following if the item described in Subsection (12)(c) is not available to the
129 general public:
130 (A) a church; or
131 (B) a charitable institution;
132 (ii) an institution of higher education if:
133 (A) the item described in Subsection (12)(c) is not available to the general public; or
134 (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
135 offered by the institution of higher education; or
136 (b) sales of an item described in Subsection (12)(c) provided for a patient by:
137 (i) a medical facility; or
138 (ii) a nursing facility; and
139 (c) Subsections (12)(a) and (b) apply to:
140 (i) food and food ingredients;
141 (ii) prepared food; or
142 (iii) alcoholic beverages;
143 (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
144 or a product transferred electronically by a person:
145 (i) regardless of the number of transactions involving the sale of that tangible personal
146 property or product transferred electronically by that person; and
147 (ii) not regularly engaged in the business of selling that type of tangible personal
148 property or product transferred electronically;
149 (b) this Subsection (13) does not apply if:
150 (i) the sale is one of a series of sales of a character to indicate that the person is
151 regularly engaged in the business of selling that type of tangible personal property or product
152 transferred electronically;
153 (ii) the person holds that person out as regularly engaged in the business of selling that
154 type of tangible personal property or product transferred electronically;
155 (iii) the person sells an item of tangible personal property or product transferred
156 electronically that the person purchased as a sale that is exempt under Subsection (25); or
157 (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
158 this state in which case the tax is based upon:
159 (A) the bill of sale or other written evidence of value of the vehicle or vessel being
160 sold; or
161 (B) in the absence of a bill of sale or other written evidence of value, the fair market
162 value of the vehicle or vessel being sold at the time of the sale as determined by the
163 commission; and
164 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
165 commission shall make rules establishing the circumstances under which:
166 (i) a person is regularly engaged in the business of selling a type of tangible personal
167 property or product transferred electronically;
168 (ii) a sale of tangible personal property or a product transferred electronically is one of
169 a series of sales of a character to indicate that a person is regularly engaged in the business of
170 selling that type of tangible personal property or product transferred electronically; or
171 (iii) a person holds that person out as regularly engaged in the business of selling a type
172 of tangible personal property or product transferred electronically;
173 (14) (a) amounts paid or charged for a purchase or lease:
174 (i) by a manufacturing facility located in the state; and
175 (ii) of machinery, equipment, or normal operating repair or replacement parts if the
176 machinery, equipment, or normal operating repair or replacement parts have an economic life
177 of three or more years and are used:
178 (A) in the manufacturing process to manufacture an item sold as tangible personal
179 property; or
180 (B) for a scrap recycler, to process an item sold as tangible personal property;
181 (b) amounts paid or charged for a purchase or lease:
182 (i) by an establishment:
183 (A) described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS Code
184 213113, Support Activities for Coal Mining, 213114, Support Activities for Metal Mining, or
185 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining, of the 2002 North
186 American Industry Classification System of the federal Executive Office of the President,
187 Office of Management and Budget; and
188 (B) located in the state; and
189 (ii) of machinery, equipment, or normal operating repair or replacement parts if the
190 machinery, equipment, or normal operating repair or replacement parts have an economic life
191 of three or more years and are used in:
192 (A) the production process to produce an item sold as tangible personal property;
193 (B) research and development;
194 (C) transporting, storing, or managing tailings, overburden, or similar waste materials
195 produced from mining;
196 (D) developing or maintaining a road, tunnel, excavation, or similar feature used in
197 mining; or
198 (E) preventing, controlling, or reducing dust or other pollutants from mining;
199 (c) amounts paid or charged for a purchase or lease:
200 (i) by an establishment:
201 (A) described in NAICS Code 518112, Web Search Portals, of the 2002 North
202 American Industry Classification System of the federal Executive Office of the President,
203 Office of Management and Budget; and
204 (B) located in the state; and
205 (ii) of machinery, equipment, or normal operating repair or replacement parts if the
206 machinery, equipment, or normal operating repair or replacement parts:
207 (A) are used in the operation of the web search portal; and
208 (B) have an economic life of three or more years;
209 (d) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
210 Utah Administrative Rulemaking Act, the commission:
211 (i) shall by rule define the term "establishment"; and
212 (ii) may by rule define what constitutes:
213 (A) processing an item sold as tangible personal property;
214 (B) the production process, to produce an item sold as tangible personal property; or
215 (C) research and development; and
216 (e) on or before October 1, 2016, and every five years after October 1, 2016, the
217 commission shall:
218 (i) review the exemptions described in this Subsection (14) and make
219 recommendations to the Revenue and Taxation Interim Committee concerning whether the
220 exemptions should be continued, modified, or repealed; and
221 (ii) include in its report:
222 (A) an estimate of the cost of the exemptions;
223 (B) the purpose and effectiveness of the exemptions; and
224 (C) the benefits of the exemptions to the state;
225 (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
226 (i) tooling;
227 (ii) special tooling;
228 (iii) support equipment;
229 (iv) special test equipment; or
230 (v) parts used in the repairs or renovations of tooling or equipment described in
231 Subsections (15)(a)(i) through (iv); and
232 (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
233 (i) the tooling, equipment, or parts are used or consumed exclusively in the
234 performance of any aerospace or electronics industry contract with the United States
235 government or any subcontract under that contract; and
236 (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
237 title to the tooling, equipment, or parts is vested in the United States government as evidenced
238 by:
239 (A) a government identification tag placed on the tooling, equipment, or parts; or
240 (B) listing on a government-approved property record if placing a government
241 identification tag on the tooling, equipment, or parts is impractical;
242 (16) sales of newspapers or newspaper subscriptions;
243 (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
244 product transferred electronically traded in as full or part payment of the purchase price, except
245 that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
246 trade-ins are limited to other vehicles only, and the tax is based upon:
247 (i) the bill of sale or other written evidence of value of the vehicle being sold and the
248 vehicle being traded in; or
249 (ii) in the absence of a bill of sale or other written evidence of value, the then existing
250 fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
251 commission; and
252 (b) Subsection (17)(a) does not apply to the following items of tangible personal
253 property or products transferred electronically traded in as full or part payment of the purchase
254 price:
255 (i) money;
256 (ii) electricity;
257 (iii) water;
258 (iv) gas; or
259 (v) steam;
260 (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
261 or a product transferred electronically used or consumed primarily and directly in farming
262 operations, regardless of whether the tangible personal property or product transferred
263 electronically:
264 (A) becomes part of real estate; or
265 (B) is installed by a:
266 (I) farmer;
267 (II) contractor; or
268 (III) subcontractor; or
269 (ii) sales of parts used in the repairs or renovations of tangible personal property or a
270 product transferred electronically if the tangible personal property or product transferred
271 electronically is exempt under Subsection (18)(a)(i); and
272 (b) amounts paid or charged for the following are subject to the taxes imposed by this
273 chapter:
274 (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
275 incidental to farming:
276 (I) machinery;
277 (II) equipment;
278 (III) materials; or
279 (IV) supplies; and
280 (B) tangible personal property that is considered to be used in a manner that is
281 incidental to farming includes:
282 (I) hand tools; or
283 (II) maintenance and janitorial equipment and supplies;
284 (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
285 transferred electronically if the tangible personal property or product transferred electronically
286 is used in an activity other than farming; and
287 (B) tangible personal property or a product transferred electronically that is considered
288 to be used in an activity other than farming includes:
289 (I) office equipment and supplies; or
290 (II) equipment and supplies used in:
291 (Aa) the sale or distribution of farm products;
292 (Bb) research; or
293 (Cc) transportation; or
294 (iii) a vehicle required to be registered by the laws of this state during the period
295 ending two years after the date of the vehicle's purchase;
296 (19) sales of hay;
297 (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
298 garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
299 garden, farm, or other agricultural produce is sold by:
300 (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
301 agricultural produce;
302 (b) an employee of the producer described in Subsection (20)(a); or
303 (c) a member of the immediate family of the producer described in Subsection (20)(a);
304 (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
305 under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
306 (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
307 nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
308 wholesaler, or retailer for use in packaging tangible personal property to be sold by that
309 manufacturer, processor, wholesaler, or retailer;
310 (23) a product stored in the state for resale;
311 (24) (a) purchases of a product if:
312 (i) the product is:
313 (A) purchased outside of this state;
314 (B) brought into this state:
315 (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
316 (II) by a nonresident person who is not living or working in this state at the time of the
317 purchase;
318 (C) used for the personal use or enjoyment of the nonresident person described in
319 Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
320 (D) not used in conducting business in this state; and
321 (ii) for:
322 (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
323 the product for a purpose for which the product is designed occurs outside of this state;
324 (B) a boat, the boat is registered outside of this state; or
325 (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
326 outside of this state;
327 (b) the exemption provided for in Subsection (24)(a) does not apply to:
328 (i) a lease or rental of a product; or
329 (ii) a sale of a vehicle exempt under Subsection (33); and
330 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
331 purposes of Subsection (24)(a), the commission may by rule define what constitutes the
332 following:
333 (i) conducting business in this state if that phrase has the same meaning in this
334 Subsection (24) as in Subsection (63);
335 (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
336 as in Subsection (63); or
337 (iii) a purpose for which a product is designed if that phrase has the same meaning in
338 this Subsection (24) as in Subsection (63);
339 (25) a product purchased for resale in this state, in the regular course of business, either
340 in its original form or as an ingredient or component part of a manufactured or compounded
341 product;
342 (26) a product upon which a sales or use tax was paid to some other state, or one of its
343 subdivisions, except that the state shall be paid any difference between the tax paid and the tax
344 imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
345 the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
346 Act;
347 (27) any sale of a service described in Subsections 59-12-103(1)(b), (c), and (d) to a
348 person for use in compounding a service taxable under the subsections;
349 (28) purchases made in accordance with the special supplemental nutrition program for
350 women, infants, and children established in 42 U.S.C. Sec. 1786;
351 (29) sales or leases of rolls, rollers, refractory brick, electric motors, or other
352 replacement parts used in the furnaces, mills, or ovens of a steel mill described in SIC Code
353 3312 of the 1987 Standard Industrial Classification Manual of the federal Executive Office of
354 the President, Office of Management and Budget;
355 (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
356 Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
357 (a) not registered in this state; and
358 (b) (i) not used in this state; or
359 (ii) used in this state:
360 (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
361 time period that does not exceed the longer of:
362 (I) 30 days in any calendar year; or
363 (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
364 the borders of this state; or
365 (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
366 period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
367 state;
368 (31) sales of aircraft manufactured in Utah;
369 (32) amounts paid for the purchase of telecommunications service for purposes of
370 providing telecommunications service;
371 (33) sales, leases, or uses of the following:
372 (a) a vehicle by an authorized carrier; or
373 (b) tangible personal property that is installed on a vehicle:
374 (i) sold or leased to or used by an authorized carrier; and
375 (ii) before the vehicle is placed in service for the first time;
376 (34) (a) 45% of the sales price of any new manufactured home; and
377 (b) 100% of the sales price of any used manufactured home;
378 (35) sales relating to schools and fundraising sales;
379 (36) sales or rentals of durable medical equipment if:
380 (a) a person presents a prescription for the durable medical equipment; and
381 (b) the durable medical equipment is used for home use only;
382 (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
383 Section 72-11-102; and
384 (b) the commission shall by rule determine the method for calculating sales exempt
385 under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
386 (38) sales to a ski resort of:
387 (a) snowmaking equipment;
388 (b) ski slope grooming equipment;
389 (c) passenger ropeways as defined in Section 72-11-102; or
390 (d) parts used in the repairs or renovations of equipment or passenger ropeways
391 described in Subsections (38)(a) through (c);
392 (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
393 (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
394 amusement, entertainment, or recreation an unassisted amusement device as defined in Section
395 59-12-102;
396 (b) if a seller that sells or rents at the same business location the right to use or operate
397 for amusement, entertainment, or recreation one or more unassisted amusement devices and
398 one or more assisted amusement devices, the exemption described in Subsection (40)(a)
399 applies if the seller separately accounts for the sales or rentals of the right to use or operate for
400 amusement, entertainment, or recreation for the assisted amusement devices; and
401 (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
402 Utah Administrative Rulemaking Act, the commission may make rules:
403 (i) governing the circumstances under which sales are at the same business location;
404 and
405 (ii) establishing the procedures and requirements for a seller to separately account for
406 the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
407 assisted amusement devices;
408 (41) (a) sales of photocopies by:
409 (i) a governmental entity; or
410 (ii) an entity within the state system of public education, including:
411 (A) a school; or
412 (B) the State Board of Education; or
413 (b) sales of publications by a governmental entity;
414 (42) amounts paid for admission to an athletic event at an institution of higher
415 education that is subject to the provisions of Title IX of the Education Amendments of 1972,
416 20 U.S.C. Sec. 1681 et seq.;
417 (43) (a) sales made to or by:
418 (i) an area agency on aging; or
419 (ii) a senior citizen center owned by a county, city, or town; or
420 (b) sales made by a senior citizen center that contracts with an area agency on aging;
421 (44) sales or leases of semiconductor fabricating, processing, research, or development
422 materials regardless of whether the semiconductor fabricating, processing, research, or
423 development materials:
424 (a) actually come into contact with a semiconductor; or
425 (b) ultimately become incorporated into real property;
426 (45) an amount paid by or charged to a purchaser for accommodations and services
427 described in Subsection 59-12-103(1)(i) to the extent the amount is exempt under Section
428 59-12-104.2;
429 (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
430 sports event registration certificate in accordance with Section 41-3-306 for the event period
431 specified on the temporary sports event registration certificate;
432 (47) (a) sales or uses of electricity, if the sales or uses are made under a tariff adopted
433 by the Public Service Commission of Utah only for purchase of electricity produced from a
434 new alternative energy source, as designated in the tariff by the Public Service Commission of
435 Utah; and
436 (b) the exemption under Subsection (47)(a) applies to the portion of the tariff rate a
437 customer pays under the tariff described in Subsection (47)(a) that exceeds the tariff rate under
438 the tariff described in Subsection (47)(a) that the customer would have paid absent the tariff;
439 (48) sales or rentals of mobility enhancing equipment if a person presents a
440 prescription for the mobility enhancing equipment;
441 (49) sales of water in a:
442 (a) pipe;
443 (b) conduit;
444 (c) ditch; or
445 (d) reservoir;
446 (50) sales of currency or coins that constitute legal tender of a state, the United States,
447 or a foreign nation;
448 (51) (a) sales of an item described in Subsection (51)(b) if the item:
449 (i) does not constitute legal tender of a state, the United States, or a foreign nation; and
450 (ii) has a gold, silver, or platinum content of 50% or more; and
451 (b) Subsection (51)(a) applies to a gold, silver, or platinum:
452 (i) ingot;
453 (ii) bar;
454 (iii) medallion; or
455 (iv) decorative coin;
456 (52) amounts paid on a sale-leaseback transaction;
457 (53) sales of a prosthetic device:
458 (a) for use on or in a human; and
459 (b) (i) for which a prescription is required; or
460 (ii) if the prosthetic device is purchased by a hospital or other medical facility;
461 (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
462 machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
463 or equipment is primarily used in the production or postproduction of the following media for
464 commercial distribution:
465 (i) a motion picture;
466 (ii) a television program;
467 (iii) a movie made for television;
468 (iv) a music video;
469 (v) a commercial;
470 (vi) a documentary; or
471 (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
472 commission by administrative rule made in accordance with Subsection (54)(d); or
473 (b) purchases, leases, or rentals of machinery or equipment by an establishment
474 described in Subsection (54)(c) that is used for the production or postproduction of the
475 following are subject to the taxes imposed by this chapter:
476 (i) a live musical performance;
477 (ii) a live news program; or
478 (iii) a live sporting event;
479 (c) the following establishments listed in the 1997 North American Industry
480 Classification System of the federal Executive Office of the President, Office of Management
481 and Budget, apply to Subsections (54)(a) and (b):
482 (i) NAICS Code 512110; or
483 (ii) NAICS Code 51219; and
484 (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
485 commission may by rule:
486 (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
487 or
488 (ii) define:
489 (A) "commercial distribution";
490 (B) "live musical performance";
491 (C) "live news program"; or
492 (D) "live sporting event";
493 (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
494 on or before June 30, 2027, of tangible personal property that:
495 (i) is leased or purchased for or by a facility that:
496 (A) is an alternative energy electricity production facility;
497 (B) is located in the state; and
498 (C) (I) becomes operational on or after July 1, 2004; or
499 (II) has its generation capacity increased by one or more megawatts on or after July 1,
500 2004, as a result of the use of the tangible personal property;
501 (ii) has an economic life of five or more years; and
502 (iii) is used to make the facility or the increase in capacity of the facility described in
503 Subsection (55)(a)(i) operational up to the point of interconnection with an existing
504 transmission grid including:
505 (A) a wind turbine;
506 (B) generating equipment;
507 (C) a control and monitoring system;
508 (D) a power line;
509 (E) substation equipment;
510 (F) lighting;
511 (G) fencing;
512 (H) pipes; or
513 (I) other equipment used for locating a power line or pole; and
514 (b) this Subsection (55) does not apply to:
515 (i) tangible personal property used in construction of:
516 (A) a new alternative energy electricity production facility; or
517 (B) the increase in the capacity of an alternative energy electricity production facility;
518 (ii) contracted services required for construction and routine maintenance activities;
519 and
520 (iii) unless the tangible personal property is used or acquired for an increase in capacity
521 of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal property used or
522 acquired after:
523 (A) the alternative energy electricity production facility described in Subsection
524 (55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
525 (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
526 in Subsection (55)(a)(iii);
527 (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
528 on or before June 30, 2027, of tangible personal property that:
529 (i) is leased or purchased for or by a facility that:
530 (A) is a waste energy production facility;
531 (B) is located in the state; and
532 (C) (I) becomes operational on or after July 1, 2004; or
533 (II) has its generation capacity increased by one or more megawatts on or after July 1,
534 2004, as a result of the use of the tangible personal property;
535 (ii) has an economic life of five or more years; and
536 (iii) is used to make the facility or the increase in capacity of the facility described in
537 Subsection (56)(a)(i) operational up to the point of interconnection with an existing
538 transmission grid including:
539 (A) generating equipment;
540 (B) a control and monitoring system;
541 (C) a power line;
542 (D) substation equipment;
543 (E) lighting;
544 (F) fencing;
545 (G) pipes; or
546 (H) other equipment used for locating a power line or pole; and
547 (b) this Subsection (56) does not apply to:
548 (i) tangible personal property used in construction of:
549 (A) a new waste energy facility; or
550 (B) the increase in the capacity of a waste energy facility;
551 (ii) contracted services required for construction and routine maintenance activities;
552 and
553 (iii) unless the tangible personal property is used or acquired for an increase in capacity
554 described in Subsection (56)(a)(i)(C)(II), tangible personal property used or acquired after:
555 (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
556 described in Subsection (56)(a)(iii); or
557 (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
558 in Subsection (56)(a)(iii);
559 (57) (a) leases of five or more years or purchases made on or after July 1, 2004, but on
560 or before June 30, 2027, of tangible personal property that:
561 (i) is leased or purchased for or by a facility that:
562 (A) is located in the state;
563 (B) produces fuel from alternative energy, including:
564 (I) methanol; or
565 (II) ethanol; and
566 (C) (I) becomes operational on or after July 1, 2004; or
567 (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
568 a result of the installation of the tangible personal property;
569 (ii) has an economic life of five or more years; and
570 (iii) is installed on the facility described in Subsection (57)(a)(i);
571 (b) this Subsection (57) does not apply to:
572 (i) tangible personal property used in construction of:
573 (A) a new facility described in Subsection (57)(a)(i); or
574 (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
575 (ii) contracted services required for construction and routine maintenance activities;
576 and
577 (iii) unless the tangible personal property is used or acquired for an increase in capacity
578 described in Subsection (57)(a)(i)(C)(II), tangible personal property used or acquired after:
579 (A) the facility described in Subsection (57)(a)(i) is operational; or
580 (B) the increased capacity described in Subsection (57)(a)(i) is operational;
581 (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
582 product transferred electronically to a person within this state if that tangible personal property
583 or product transferred electronically is subsequently shipped outside the state and incorporated
584 pursuant to contract into and becomes a part of real property located outside of this state;
585 (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
586 state or political entity to which the tangible personal property is shipped imposes a sales, use,
587 gross receipts, or other similar transaction excise tax on the transaction against which the other
588 state or political entity allows a credit for sales and use taxes imposed by this chapter; and
589 (c) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund,
590 a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
591 refund:
592 (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
593 (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
594 which the sale is made;
595 (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
596 sale prior to filing for the refund;
597 (iv) for sales and use taxes paid under this chapter on the sale;
598 (v) in accordance with Section 59-1-1410; and
599 (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410, if
600 the person files for the refund on or before June 30, 2011;
601 (59) purchases:
602 (a) of one or more of the following items in printed or electronic format:
603 (i) a list containing information that includes one or more:
604 (A) names; or
605 (B) addresses; or
606 (ii) a database containing information that includes one or more:
607 (A) names; or
608 (B) addresses; and
609 (b) used to send direct mail;
610 (60) redemptions or repurchases of a product by a person if that product was:
611 (a) delivered to a pawnbroker as part of a pawn transaction; and
612 (b) redeemed or repurchased within the time period established in a written agreement
613 between the person and the pawnbroker for redeeming or repurchasing the product;
614 (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
615 (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
616 and
617 (ii) has a useful economic life of one or more years; and
618 (b) the following apply to Subsection (61)(a):
619 (i) telecommunications enabling or facilitating equipment, machinery, or software;
620 (ii) telecommunications equipment, machinery, or software required for 911 service;
621 (iii) telecommunications maintenance or repair equipment, machinery, or software;
622 (iv) telecommunications switching or routing equipment, machinery, or software; or
623 (v) telecommunications transmission equipment, machinery, or software;
624 (62) (a) beginning on July 1, 2006, and ending on June 30, 2027, purchases of tangible
625 personal property or a product transferred electronically that are used in the research and
626 development of alternative energy technology; and
627 (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
628 commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
629 purchases of tangible personal property or a product transferred electronically that are used in
630 the research and development of alternative energy technology;
631 (63) (a) purchases of tangible personal property or a product transferred electronically
632 if:
633 (i) the tangible personal property or product transferred electronically is:
634 (A) purchased outside of this state;
635 (B) brought into this state at any time after the purchase described in Subsection
636 (63)(a)(i)(A); and
637 (C) used in conducting business in this state; and
638 (ii) for:
639 (A) tangible personal property or a product transferred electronically other than the
640 tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
641 for a purpose for which the property is designed occurs outside of this state; or
642 (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
643 outside of this state;
644 (b) the exemption provided for in Subsection (63)(a) does not apply to:
645 (i) a lease or rental of tangible personal property or a product transferred electronically;
646 or
647 (ii) a sale of a vehicle exempt under Subsection (33); and
648 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
649 purposes of Subsection (63)(a), the commission may by rule define what constitutes the
650 following:
651 (i) conducting business in this state if that phrase has the same meaning in this
652 Subsection (63) as in Subsection (24);
653 (ii) the first use of tangible personal property or a product transferred electronically if
654 that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
655 (iii) a purpose for which tangible personal property or a product transferred
656 electronically is designed if that phrase has the same meaning in this Subsection (63) as in
657 Subsection (24);
658 (64) sales of disposable home medical equipment or supplies if:
659 (a) a person presents a prescription for the disposable home medical equipment or
660 supplies;
661 (b) the disposable home medical equipment or supplies are used exclusively by the
662 person to whom the prescription described in Subsection (64)(a) is issued; and
663 (c) the disposable home medical equipment and supplies are listed as eligible for
664 payment under:
665 (i) Title XVIII, federal Social Security Act; or
666 (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
667 (65) sales:
668 (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
669 District Act; or
670 (b) of tangible personal property to a subcontractor of a public transit district, if the
671 tangible personal property is:
672 (i) clearly identified; and
673 (ii) installed or converted to real property owned by the public transit district;
674 (66) sales of construction materials:
675 (a) purchased on or after July 1, 2010;
676 (b) purchased by, on behalf of, or for the benefit of an international airport:
677 (i) located within a county of the first class; and
678 (ii) that has a United States customs office on its premises; and
679 (c) if the construction materials are:
680 (i) clearly identified;
681 (ii) segregated; and
682 (iii) installed or converted to real property:
683 (A) owned or operated by the international airport described in Subsection (66)(b); and
684 (B) located at the international airport described in Subsection (66)(b);
685 (67) sales of construction materials:
686 (a) purchased on or after July 1, 2008;
687 (b) purchased by, on behalf of, or for the benefit of a new airport:
688 (i) located within a county of the second class; and
689 (ii) that is owned or operated by a city in which an airline as defined in Section
690 59-2-102 is headquartered; and
691 (c) if the construction materials are:
692 (i) clearly identified;
693 (ii) segregated; and
694 (iii) installed or converted to real property:
695 (A) owned or operated by the new airport described in Subsection (67)(b);
696 (B) located at the new airport described in Subsection (67)(b); and
697 (C) as part of the construction of the new airport described in Subsection (67)(b);
698 (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
699 (69) purchases and sales described in Section 63H-4-111;
700 (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
701 overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
702 a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
703 lists a state or country other than this state as the location of registry of the fixed wing turbine
704 powered aircraft; or
705 (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
706 provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
707 a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
708 lists a state or country other than this state as the location of registry of the fixed wing turbine
709 powered aircraft;
710 (71) subject to Section 59-12-104.4, sales of a textbook for a higher education course:
711 (a) to a person admitted to an institution of higher education; and
712 (b) by a seller, other than a bookstore owned by an institution of higher education, if
713 51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
714 textbook for a higher education course;
715 (72) a license fee or tax a municipality imposes in accordance with Subsection
716 10-1-203(5) on a purchaser from a business for which the municipality provides an enhanced
717 level of municipal services;
718 (73) amounts paid or charged for construction materials used in the construction of a
719 new or expanding life science research and development facility in the state, if the construction
720 materials are:
721 (a) clearly identified;
722 (b) segregated; and
723 (c) installed or converted to real property;
724 (74) amounts paid or charged for:
725 (a) a purchase or lease of machinery and equipment that:
726 (i) are used in performing qualified research:
727 (A) as defined in Section 41(d), Internal Revenue Code; and
728 (B) in the state; and
729 (ii) have an economic life of three or more years; and
730 (b) normal operating repair or replacement parts:
731 (i) for the machinery and equipment described in Subsection (74)(a); and
732 (ii) that have an economic life of three or more years;
733 (75) a sale or lease of tangible personal property used in the preparation of prepared
734 food if:
735 (a) for a sale:
736 (i) the ownership of the seller and the ownership of the purchaser are identical; and
737 (ii) the seller or the purchaser paid a tax under this chapter on the purchase of that
738 tangible personal property prior to making the sale; or
739 (b) for a lease:
740 (i) the ownership of the lessor and the ownership of the lessee are identical; and
741 (ii) the lessor or the lessee paid a tax under this chapter on the purchase of that tangible
742 personal property prior to making the lease;
743 (76) (a) purchases of machinery or equipment if:
744 (i) the purchaser is an establishment described in NAICS Subsector 713, Amusement,
745 Gambling, and Recreation Industries, of the 2012 North American Industry Classification
746 System of the federal Executive Office of the President, Office of Management and Budget;
747 (ii) the machinery or equipment:
748 (A) has an economic life of three or more years; and
749 (B) is used by one or more persons who pay admission or user fees described in
750 Subsection 59-12-103(1)(f) to the purchaser of the machinery and equipment; and
751 (iii) 51% or more of the purchaser's sales revenue for the previous calendar quarter is:
752 (A) amounts paid or charged as admission or user fees described in Subsection
753 59-12-103(1)(f); and
754 (B) subject to taxation under this chapter;
755 (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
756 commission may make rules for verifying that 51% of a purchaser's sales revenue for the
757 previous calendar quarter is:
758 (i) amounts paid or charged as admission or user fees described in Subsection
759 59-12-103(1)(f); and
760 (ii) subject to taxation under this chapter; and
761 (c) on or before the November 2018 interim meeting, and every five years after the
762 November 2018 interim meeting, the commission shall review the exemption provided in this
763 Subsection (76) and report to the Revenue and Taxation Interim Committee on:
764 (i) the revenue lost to the state and local taxing jurisdictions as a result of the
765 exemption;
766 (ii) the purpose and effectiveness of the exemption; and
767 (iii) whether the exemption benefits the state;
768 (77) purchases of a short-term lodging consumable by a business that provides
769 accommodations and services described in Subsection 59-12-103(1)(i);
770 (78) amounts paid or charged to access a database:
771 (a) if the primary purpose for accessing the database is to view or retrieve information
772 from the database; and
773 (b) not including amounts paid or charged for a:
774 (i) digital audiowork;
775 (ii) digital audio-visual work; or
776 (iii) digital book;
777 (79) amounts paid or charged for a purchase or lease made by an electronic financial
778 payment service, of:
779 (a) machinery and equipment that:
780 (i) are used in the operation of the electronic financial payment service; and
781 (ii) have an economic life of three or more years; and
782 (b) normal operating repair or replacement parts that:
783 (i) are used in the operation of the electronic financial payment service; and
784 (ii) have an economic life of three or more years;
785 (80) beginning on April 1, 2013, sales of a fuel cell as defined in Section 54-15-102;
786 (81) amounts paid or charged for a purchase or lease of tangible personal property or a
787 product transferred electronically if the tangible personal property or product transferred
788 electronically:
789 (a) is stored, used, or consumed in the state; and
790 (b) is temporarily brought into the state from another state:
791 (i) during a disaster period as defined in Section 53-2a-1202;
792 (ii) by an out-of-state business as defined in Section 53-2a-1202;
793 (iii) for a declared state disaster or emergency as defined in Section 53-2a-1202; and
794 (iv) for disaster- or emergency-related work as defined in Section 53-2a-1202;
795 (82) sales of goods and services at a morale, welfare, and recreation facility, as defined
796 in Section 39-9-102, made pursuant to Title 39, Chapter 9, State Morale, Welfare, and
797 Recreation Program;
798 (83) amounts paid or charged for a purchase or lease of molten magnesium; [
799 (84) (a) except as provided in Subsection (84)(b), amounts paid or charged for a
800 purchase or lease made by a drilling equipment manufacturer of machinery, equipment,
801 materials, or normal operating repair or replacement parts:
802 (i) that are used or consumed exclusively in the drilling equipment manufacturer's
803 manufacturing process; and
804 (ii) except for office:
805 (A) equipment; or
806 (B) supplies; and
807 (b) beginning on July 1, 2015, and ending on June 30, 2017, a person may claim an
808 exemption described in Subsection (84)(a) only by filing for a refund:
809 (i) of 50% of the tax paid on the amounts paid or charged; and
810 (ii) in accordance with Section 59-1-1410[
811 (85) amounts paid or charged for a purchase or lease by a consumer on or after July 1,
812 2016, of machinery, equipment, parts, or materials that are:
813 (a) used for generating solar energy;
814 (b) located in the state; and
815 (c) installed for residential use.
Legislative Review Note
Office of Legislative Research and General Counsel