This document includes House Committee Amendments incorporated into the bill on Tue, Mar 7, 2017 at 4:11 PM by ryoung.
Representative Jeremy A. Peterson proposes the following substitute bill:


1     
RECYCLING MARKET DEVELOPMENT ZONE AMENDMENTS

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Jeremy A. Peterson

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions relating to recycling market development zones.
10     Highlighted Provisions:
11          This bill:
12          ▸     provides that a person, claimant, estate, or trust may not claim a recycling market
13     development zone individual income or corporate income tax credit beginning on a
14     certain date;
15          ▸     repeals the recycling market development zone individual income and corporate
16     income tax credits on a certain date;
17          ▸     provides a sales and use tax exemption for certain machinery and equipment used in
18     commercial composting or manufacturing facilities or plant units that produce
19     recycled items for sale or reduce or reuse postconsumer waste material; and
20          ▸     makes technical and conforming changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          This bill provides a special effective date.
25     Utah Code Sections Affected:

26     AMENDS:
27          59-7-159, as enacted by Laws of Utah 2016, Third Special Session, Chapter 1
28          59-7-610, as last amended by Laws of Utah 2015, Chapter 283
29          59-10-137, as enacted by Laws of Utah 2016, Third Special Session, Chapter 1
30          59-10-1007, as last amended by Laws of Utah 2015, Chapter 283
31          59-12-104, as last amended by Laws of Utah 2016, Third Special Session, Chapter 6
32          63I-1-263, as last amended by Laws of Utah 2016, Chapters 65, 136, 156, 322, and 408
33          63I-2-259, as last amended by Laws of Utah 2015, Chapter 139
34          63I-2-263, as last amended by Laws of Utah 2016, Third Special Session, Chapter 2
35          63N-2-402, as last amended by Laws of Utah 2015, Chapter 30 and renumbered and
36     amended by Laws of Utah 2015, Chapter 283
37          63N-2-410, as renumbered and amended by Laws of Utah 2015, Chapter 283
38     

39     Be it enacted by the Legislature of the state of Utah:
40          Section 1. Section 59-7-159 is amended to read:
41          59-7-159. Review of credits allowed under this chapter.
42          (1) As used in this section, "committee" means the Revenue and Taxation Interim
43     Committee.
44          (2) (a) The committee shall review the tax credits described in this chapter as provided
45     in Subsection (3) and make recommendations concerning whether the tax credits should be
46     continued, modified, or repealed.
47          (b) In conducting the review required under Subsection (2)(a), the committee shall:
48          (i) schedule time on at least one committee agenda to conduct the review;
49          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
50     under review to provide testimony;
51          (iii) (A) invite the Governor's Office of Economic Development to present a summary
52     and analysis of the information for each tax credit regarding which the Governor's Office of
53     Economic Development is required to make a report under this chapter; and
54          (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
55     analysis of the information for each tax credit regarding which the Office of the Legislative
56     Fiscal Analyst is required to make a report under this chapter;

57          (iv) ensure that the committee's recommendations described in this section include an
58     evaluation of:
59          (A) the cost of the tax credit to the state;
60          (B) the purpose and effectiveness of the tax credit; and
61          (C) the extent to which the state benefits from the tax credit; and
62          (v) undertake other review efforts as determined by the committee chairs or as
63     otherwise required by law.
64          (3) (a) On or before November 30, 2017, and every three years after 2017, the
65     committee shall conduct the review required under Subsection (2) of the tax credits allowed
66     under the following sections:
67          (i) Section 59-7-601;
68          (ii) Section 59-7-607;
69          (iii) Section 59-7-612;
70          (iv) Section 59-7-614.1; and
71          (v) Section 59-7-614.5.
72          (b) On or before November 30, 2018, and every three years after 2018, the committee
73     shall conduct the review required under Subsection (2) of the tax credits allowed under the
74     following sections:
75          (i) Section 59-7-609;
76          (ii) Section 59-7-614.2;
77          (iii) Section 59-7-614.10;
78          (iv) Section 59-7-617;
79          (v) Section 59-7-619; and
80          (vi) Section 59-7-620.
81          (c) On or before November 30, 2019, and every three years after 2019, the committee
82     shall conduct the review required under Subsection (2) of the tax credits allowed under the
83     following sections:
84          (i) Section 59-7-605;
85          [(ii) Section 59-7-610;]
86          [(iii)] (ii) Section 59-7-614;
87          [(iv)] (iii) Section 59-7-614.7;

88          [(v)] (iv) Section 59-7-614.8; and
89          [(vi)] (v) Section 59-7-618.
90          (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
91     conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
92     2017.
93          (ii) The committee shall complete a review described in this Subsection (3)(d) three
94     years after the effective date of the tax credit and every three years after the initial review date.
95          Section 2. Section 59-7-610 is amended to read:
96          59-7-610. Recycling market development zones tax credit.
97          (1) [For taxable years] (a) Until Subsection (1)(b) applies and for a taxable year
98     beginning on or after January 1, 1996, a business operating in a recycling market development
99     zone as defined in Section 63N-2-402 may claim a tax credit as provided in this section.
100          (b) Subject to Subsection (8), for a taxable year beginning on or after January 1, 2018,
101     a person may not claim a tax credit under this section.
102          [(a)] (c) (i) There shall be allowed a nonrefundable tax credit of 5% of the purchase
103     price paid for machinery and equipment used directly in:
104          (A) commercial composting; or
105          (B) manufacturing facilities or plant units that:
106          (I) manufacture, process, compound, or produce recycled items of tangible personal
107     property for sale; or
108          (II) reduce or reuse postconsumer waste material.
109          (ii) The Governor's Office of Economic Development shall certify that the machinery
110     and equipment described in Subsection [(1)(a)(i)] (1)(c)(i) are integral to the composting or
111     recycling process:
112          (A) on a form provided by the commission; and
113          (B) before a taxpayer is allowed a tax credit under this section.
114          (iii) The Governor's Office of Economic Development shall provide a taxpayer seeking
115     to claim a tax credit under this section with a copy of the form described in Subsection
116     [(1)(a)(ii)] (1)(c)(ii).
117          (iv) The taxpayer described in Subsection [(1)(a)(iii)] (1)(c)(iii) shall retain a copy of
118     the form received under Subsection [(1)(a)(iii)] (1)(c)(iii).

119          [(b)] (d) There shall be allowed a nonrefundable tax credit equal to 20% of net
120     expenditures up to $10,000 to third parties for rent, wages, supplies, tools, test inventory, and
121     utilities made by the taxpayer for establishing and operating recycling or composting
122     technology in Utah, with an annual maximum tax credit of $2,000.
123          (2) The total nonrefundable tax credit allowed under this section may not exceed 40%
124     of the Utah income tax liability of the taxpayer prior to any tax credits in the taxable year of
125     purchase prior to claiming the tax credit authorized by this section.
126          (3) (a) Any tax credit not used for the taxable year in which the purchase price on
127     composting or recycling machinery and equipment was paid may be carried over for credit
128     against the business' income taxes in the three succeeding taxable years until the total tax credit
129     amount is used.
130          (b) Tax credits not claimed by a business on the business' state income tax return
131     within three years are forfeited.
132          (4) The commission shall make rules governing what information shall be filed with
133     the commission to verify the entitlement to and amount of a tax credit.
134          (5) (a) Notwithstanding Subsection (1)(a), for taxable years beginning on or after
135     January 1, 2001, a taxpayer may not claim or carry forward a tax credit described in Subsection
136     (1)(a) in a taxable year during which the taxpayer claims or carries forward a tax credit under
137     Section 63N-2-213.
138          (b) For a taxable year other than a taxable year during which the taxpayer may not
139     claim or carry forward a tax credit in accordance with Subsection (5)(a), a taxpayer may claim
140     or carry forward a tax credit described in Subsection (1)(a):
141          (i) if the taxpayer may claim or carry forward the tax credit in accordance with
142     Subsections (1) and (2); and
143          (ii) subject to Subsections (3) and (4).
144          (6) Notwithstanding Subsection [(1)(b)] (1)(d), for taxable years beginning on or after
145     January 1, 2001, a taxpayer may not claim a tax credit described in Subsection [(1)(b)] (1)(d) in
146     a taxable year during which the taxpayer claims or carries forward a tax credit under Section
147     63N-2-213.
148          (7) A taxpayer may not claim or carry forward a tax credit available under this section
149     for a taxable year during which the taxpayer has claimed the targeted business income tax

150     credit available under Section 63N-2-305.
151          (8) (a) A person may not claim a tax credit under this section:
152          (i) for the purchase price of machinery or equipment described in Subsection (1)(c), if
153     the machinery or equipment is purchased on or after January 1, 2018; or
154          (ii) for an expenditure described in Subsection (1)(d), if the expenditure is made on or
155     after January 1, 2018.
156          (b) Notwithstanding Subsection (1)(b), a person may carry forward a tax credit in
157     accordance with this section if:
158          (i) the person is entitled to a tax credit under this section; and
159          (ii) (A) for the purchase price of machinery or equipment described in Subsection
160     (1)(c), the machinery or equipment is purchased on or before December 31, 2017; or
161          (B) for an expenditure described in Subsection (1)(d), the expenditure is made on or
162     before December 31, 2017.
163          Section 3. Section 59-10-137 is amended to read:
164          59-10-137. Review of credits allowed under this chapter.
165          (1) As used in this section, "committee" means the Revenue and Taxation Interim
166     Committee.
167          (2) (a) The committee shall review the tax credits described in this chapter as provided
168     in Subsection (3) and make recommendations concerning whether the tax credits should be
169     continued, modified, or repealed.
170          (b) In conducting the review required under Subsection (2)(a), the committee shall:
171          (i) schedule time on at least one committee agenda to conduct the review;
172          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
173     under review to provide testimony;
174          (iii) (A) invite the Governor's Office of Economic Development to present a summary
175     and analysis of the information for each tax credit regarding which the Governor's Office of
176     Economic Development is required to make a report under this chapter; and
177          (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
178     analysis of the information for each tax credit regarding which the Office of the Legislative
179     Fiscal Analyst is required to make a report under this chapter;
180          (iv) ensure that the committee's recommendations described in this section include an

181     evaluation of:
182          (A) the cost of the tax credit to the state;
183          (B) the purpose and effectiveness of the tax credit; and
184          (C) the extent to which the state benefits from the tax credit; and
185          (v) undertake other review efforts as determined by the committee chairs or as
186     otherwise required by law.
187          (3) (a) On or before November 30, 2017, and every three years after 2017, the
188     committee shall conduct the review required under Subsection (2) of the tax credits allowed
189     under the following sections:
190          (i) Section 59-10-1004;
191          (ii) Section 59-10-1010;
192          (iii) Section 59-10-1015;
193          (iv) Section 59-10-1025;
194          (v) Section 59-10-1027;
195          (vi) Section 59-10-1031;
196          (vii) Section 59-10-1032;
197          (viii) Section 59-10-1035;
198          (ix) Section 59-10-1104;
199          (x) Section 59-10-1105; and
200          (xi) Section 59-10-1108.
201          (b) On or before November 30, 2018, and every three years after 2018, the committee
202     shall conduct the review required under Subsection (2) of the tax credits allowed under the
203     following sections:
204          (i) Section 59-10-1005;
205          (ii) Section 59-10-1006;
206          (iii) Section 59-10-1012;
207          (iv) Section 59-10-1013;
208          (v) Section 59-10-1022;
209          (vi) Section 59-10-1023;
210          (vii) Section 59-10-1028;
211          (viii) Section 59-10-1034;

212          (ix) Section 59-10-1037; and
213          (x) Section 59-10-1107.
214          (c) On or before November 30, 2019, and every three years after 2019, the committee
215     shall conduct the review required under Subsection (2) of the tax credits allowed under the
216     following sections:
217          [(i) Section 59-10-1007;]
218          [(ii)] (i) Section 59-10-1009;
219          [(iii)] (ii) Section 59-10-1014;
220          [(iv)] (iii) Section 59-10-1017;
221          [(v)] (iv) Section 59-10-1018;
222          [(vi)] (v) Section 59-10-1019;
223          [(vii)] (vi) Section 59-10-1024;
224          [(viii)] (vii) Section 59-10-1029;
225          [(ix)] (viii) Section 59-10-1030;
226          [(x)] (ix) Section 59-10-1033;
227          [(xi)] (x) Section 59-10-1036;
228          [(xii)] (xi) Section 59-10-1106; and
229          [(xiii)] (xii) Section 59-10-1111.
230          (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
231     conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
232     2017.
233          (ii) The committee shall complete a review described in this Subsection (3)(d) three
234     years after the effective date of the tax credit and every three years after the initial review date.
235          Section 4. Section 59-10-1007 is amended to read:
236          59-10-1007. Recycling market development zones tax credit.
237          (1) [For taxable years] (a) Except as provided in Subsection (1)(b) and for a taxable
238     year beginning on or after January 1, 1996, a claimant, estate, or trust in a recycling market
239     development zone as defined in Section 63N-2-402 may claim a nonrefundable tax credit as
240     provided in this section.
241          (b) Subject to Subsection (8), for a taxable year beginning on or after January 1, 2018,
242     a claimant, estate, or trust may not claim a tax credit under this section.

243          [(a)] (c) (i) There shall be allowed a tax credit of 5% of the purchase price paid for
244     machinery and equipment used directly in:
245          (A) commercial composting; or
246          (B) manufacturing facilities or plant units that:
247          (I) manufacture, process, compound, or produce recycled items of tangible personal
248     property for sale; or
249          (II) reduce or reuse postconsumer waste material.
250          (ii) The Governor's Office of Economic Development shall certify that the machinery
251     and equipment described in Subsection [(1)(a)(i)] (1)(c)(i) are integral to the composting or
252     recycling process:
253          (A) on a form provided by the commission; and
254          (B) before a claimant, estate, or trust is allowed a tax credit under this section.
255          (iii) The Governor's Office of Economic Development shall provide a claimant, estate,
256     or trust seeking to claim a tax credit under this section with a copy of the form described in
257     Subsection [(1)(a)(ii)] (1)(c)(ii).
258          (iv) The claimant, estate, or trust described in Subsection [(1)(a)(iii)] (1)(c)(iii) shall
259     retain a copy of the form received under Subsection [(1)(a)(iii)] (1)(c)(iii).
260          [(b)] (d) There shall be allowed a tax credit equal to 20% of net expenditures up to
261     $10,000 to third parties for rent, wages, supplies, tools, test inventory, and utilities made by the
262     claimant, estate, or trust for establishing and operating recycling or composting technology in
263     Utah, with an annual maximum tax credit of $2,000.
264          (2) The total tax credit allowed under this section may not exceed 40% of the Utah
265     income tax liability of the claimant, estate, or trust prior to any tax credits in the taxable year of
266     purchase prior to claiming the tax credit authorized by this section.
267          (3) (a) Any tax credit not used for the taxable year in which the purchase price on
268     composting or recycling machinery and equipment was paid may be carried forward against the
269     claimant's, estate's, or trusts's tax liability under this chapter in the three succeeding taxable
270     years until the total tax credit amount is used.
271          (b) Tax credits not claimed by a claimant, estate, or trust on the claimant's, estate's, or
272     trust's tax return under this chapter within three years are forfeited.
273          (4) The commission shall make rules governing what information shall be filed with

274     the commission to verify the entitlement to and amount of a tax credit.
275          (5) (a) Notwithstanding Subsection [(1)(a)] (1)(c), for taxable years beginning on or
276     after January 1, 2001, a claimant, estate, or trust may not claim or carry forward a tax credit
277     described in Subsection [(1)(a)] (1)(c) in a taxable year during which the claimant, estate, or
278     trust claims or carries forward a tax credit under Section 63N-2-213.
279          (b) For a taxable year other than a taxable year during which the claimant, estate, or
280     trust may not claim or carry forward a tax credit in accordance with Subsection (5)(a), a
281     claimant, estate, or trust may claim or carry forward a tax credit described in Subsection
282     [(1)(a)] (1)(c):
283          (i) if the claimant, estate, or trust may claim or carry forward the tax credit in
284     accordance with Subsections (1) and (2); and
285          (ii) subject to Subsections (3) and (4).
286          (6) Notwithstanding Subsection [(1)(b)] (1)(d), for taxable years beginning on or after
287     January 1, 2001, a claimant, estate, or trust may not claim a tax credit described in Subsection
288     [(1)(b)] (1)(d) in a taxable year during which the claimant, estate, or trust claims or carries
289     forward a tax credit under Section 63N-2-213.
290          (7) A claimant, estate, or trust may not claim or carry forward a tax credit available
291     under this section for a taxable year during which the claimant, estate, or trust has claimed the
292     targeted business income tax credit available under Section 63N-2-305.
293          (8) (a) A claimant, estate, or trust may not claim a tax credit under this section:
294          (i) for the purchase price of machinery or equipment described in Subsection (1)(c), if
295     the machinery or equipment is purchased on or after January 1, 2018; or
296          (ii) for an expenditure described in Subsection (1)(d), if the expenditure is made on or
297     after January 1, 2018.
298          (b) Notwithstanding Subsection (1)(b), a person may carry forward a tax credit in
299     accordance with this section if:
300          (i) the person is entitled to a tax credit under this section; and
301          (ii) (A) for the purchase price of machinery or equipment described in Subsection
302     (1)(c), the machinery or equipment is purchased on or before December 31, 2017; or
303          (B) for an expenditure described in Subsection (1)(d), the expenditure is made on or
304     before December 31, 2017.

305          Section 5. Section 59-12-104 is amended to read:
306          59-12-104. Exemptions.
307          Exemptions from the taxes imposed by this chapter are as follows:
308          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
309     under Chapter 13, Motor and Special Fuel Tax Act;
310          (2) subject to Section 59-12-104.6, sales to the state, its institutions, and its political
311     subdivisions; however, this exemption does not apply to sales of:
312          (a) construction materials except:
313          (i) construction materials purchased by or on behalf of institutions of the public
314     education system as defined in Utah Constitution, Article X, Section 2, provided the
315     construction materials are clearly identified and segregated and installed or converted to real
316     property which is owned by institutions of the public education system; and
317          (ii) construction materials purchased by the state, its institutions, or its political
318     subdivisions which are installed or converted to real property by employees of the state, its
319     institutions, or its political subdivisions; or
320          (b) tangible personal property in connection with the construction, operation,
321     maintenance, repair, or replacement of a project, as defined in Section 11-13-103, or facilities
322     providing additional project capacity, as defined in Section 11-13-103;
323          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
324          (i) the proceeds of each sale do not exceed $1; and
325          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
326     the cost of the item described in Subsection (3)(b) as goods consumed; and
327          (b) Subsection (3)(a) applies to:
328          (i) food and food ingredients; or
329          (ii) prepared food;
330          (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
331          (i) alcoholic beverages;
332          (ii) food and food ingredients; or
333          (iii) prepared food;
334          (b) sales of tangible personal property or a product transferred electronically:
335          (i) to a passenger;

336          (ii) by a commercial airline carrier; and
337          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
338          (c) services related to Subsection (4)(a) or (b);
339          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
340     and equipment:
341          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
342     North American Industry Classification System of the federal Executive Office of the
343     President, Office of Management and Budget; and
344          (II) for:
345          (Aa) installation in an aircraft, including services relating to the installation of parts or
346     equipment in the aircraft;
347          (Bb) renovation of an aircraft; or
348          (Cc) repair of an aircraft; or
349          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
350     commerce; or
351          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
352     aircraft operated by a common carrier in interstate or foreign commerce; and
353          (b) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund,
354     a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
355     refund:
356          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
357          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
358          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
359     the sale prior to filing for the refund;
360          (iv) for sales and use taxes paid under this chapter on the sale;
361          (v) in accordance with Section 59-1-1410; and
362          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410, if
363     the person files for the refund on or before September 30, 2011;
364          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
365     records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
366     exhibitor, distributor, or commercial television or radio broadcaster;

367          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
368     property if the cleaning or washing of the tangible personal property is not assisted cleaning or
369     washing of tangible personal property;
370          (b) if a seller that sells at the same business location assisted cleaning or washing of
371     tangible personal property and cleaning or washing of tangible personal property that is not
372     assisted cleaning or washing of tangible personal property, the exemption described in
373     Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
374     or washing of the tangible personal property; and
375          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
376     Utah Administrative Rulemaking Act, the commission may make rules:
377          (i) governing the circumstances under which sales are at the same business location;
378     and
379          (ii) establishing the procedures and requirements for a seller to separately account for
380     sales of assisted cleaning or washing of tangible personal property;
381          (8) sales made to or by religious or charitable institutions in the conduct of their regular
382     religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
383     fulfilled;
384          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
385     this state if the vehicle is:
386          (a) not registered in this state; and
387          (b) (i) not used in this state; or
388          (ii) used in this state:
389          (A) if the vehicle is not used to conduct business, for a time period that does not
390     exceed the longer of:
391          (I) 30 days in any calendar year; or
392          (II) the time period necessary to transport the vehicle to the borders of this state; or
393          (B) if the vehicle is used to conduct business, for the time period necessary to transport
394     the vehicle to the borders of this state;
395          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
396          (i) the item is intended for human use; and
397          (ii) (A) a prescription was issued for the item; or

398          (B) the item was purchased by a hospital or other medical facility; and
399          (b) (i) Subsection (10)(a) applies to:
400          (A) a drug;
401          (B) a syringe; or
402          (C) a stoma supply; and
403          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
404     commission may by rule define the terms:
405          (A) "syringe"; or
406          (B) "stoma supply";
407          (11) purchases or leases exempt under Section 19-12-201;
408          (12) (a) sales of an item described in Subsection (12)(c) served by:
409          (i) the following if the item described in Subsection (12)(c) is not available to the
410     general public:
411          (A) a church; or
412          (B) a charitable institution;
413          (ii) an institution of higher education if:
414          (A) the item described in Subsection (12)(c) is not available to the general public; or
415          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
416     offered by the institution of higher education; or
417          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
418          (i) a medical facility; or
419          (ii) a nursing facility; and
420          (c) Subsections (12)(a) and (b) apply to:
421          (i) food and food ingredients;
422          (ii) prepared food; or
423          (iii) alcoholic beverages;
424          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
425     or a product transferred electronically by a person:
426          (i) regardless of the number of transactions involving the sale of that tangible personal
427     property or product transferred electronically by that person; and
428          (ii) not regularly engaged in the business of selling that type of tangible personal

429     property or product transferred electronically;
430          (b) this Subsection (13) does not apply if:
431          (i) the sale is one of a series of sales of a character to indicate that the person is
432     regularly engaged in the business of selling that type of tangible personal property or product
433     transferred electronically;
434          (ii) the person holds that person out as regularly engaged in the business of selling that
435     type of tangible personal property or product transferred electronically;
436          (iii) the person sells an item of tangible personal property or product transferred
437     electronically that the person purchased as a sale that is exempt under Subsection (25); or
438           (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
439     this state in which case the tax is based upon:
440          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
441     sold; or
442          (B) in the absence of a bill of sale or other written evidence of value, the fair market
443     value of the vehicle or vessel being sold at the time of the sale as determined by the
444     commission; and
445          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
446     commission shall make rules establishing the circumstances under which:
447          (i) a person is regularly engaged in the business of selling a type of tangible personal
448     property or product transferred electronically;
449          (ii) a sale of tangible personal property or a product transferred electronically is one of
450     a series of sales of a character to indicate that a person is regularly engaged in the business of
451     selling that type of tangible personal property or product transferred electronically; or
452          (iii) a person holds that person out as regularly engaged in the business of selling a type
453     of tangible personal property or product transferred electronically;
454          (14) (a) amounts paid or charged for a purchase or lease:
455          (i) by a manufacturing facility located in the state; and
456          (ii) of machinery, equipment, or normal operating repair or replacement parts if the
457     machinery, equipment, or normal operating repair or replacement parts have an economic life
458     of three or more years and are used:
459          (A) in the manufacturing process to manufacture an item sold as tangible personal

460     property; or
461          (B) for a scrap recycler, to process an item sold as tangible personal property;
462          (b) amounts paid or charged for a purchase or lease:
463          (i) by an establishment:
464          (A) described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS Code
465     213113, Support Activities for Coal Mining, 213114, Support Activities for Metal Mining, or
466     213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining, of the 2002 North
467     American Industry Classification System of the federal Executive Office of the President,
468     Office of Management and Budget; and
469          (B) located in the state; and
470          (ii) of machinery, equipment, or normal operating repair or replacement parts if the
471     machinery, equipment, or normal operating repair or replacement parts have an economic life
472     of three or more years and are used in:
473          (A) the production process to produce an item sold as tangible personal property;
474          (B) research and development;
475          (C) transporting, storing, or managing tailings, overburden, or similar waste materials
476     produced from mining;
477          (D) developing or maintaining a road, tunnel, excavation, or similar feature used in
478     mining; or
479          (E) preventing, controlling, or reducing dust or other pollutants from mining;
480          (c) amounts paid or charged for a purchase or lease:
481          (i) by an establishment:
482          (A) described in NAICS Code 518112, Web Search Portals, of the 2002 North
483     American Industry Classification System of the federal Executive Office of the President,
484     Office of Management and Budget; and
485          (B) located in the state; and
486          (ii) of machinery, equipment, or normal operating repair or replacement parts if the
487     machinery, equipment, or normal operating repair or replacement parts:
488          (A) are used in the operation of the web search portal; and
489          (B) have an economic life of three or more years; and
490          (d) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,

491     Utah Administrative Rulemaking Act, the commission:
492          (i) shall by rule define the term "establishment"; and
493          (ii) may by rule define what constitutes:
494          (A) processing an item sold as tangible personal property;
495          (B) the production process, to produce an item sold as tangible personal property; or
496          (C) research and development;
497          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
498          (i) tooling;
499          (ii) special tooling;
500          (iii) support equipment;
501          (iv) special test equipment; or
502          (v) parts used in the repairs or renovations of tooling or equipment described in
503     Subsections (15)(a)(i) through (iv); and
504          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
505          (i) the tooling, equipment, or parts are used or consumed exclusively in the
506     performance of any aerospace or electronics industry contract with the United States
507     government or any subcontract under that contract; and
508          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
509     title to the tooling, equipment, or parts is vested in the United States government as evidenced
510     by:
511          (A) a government identification tag placed on the tooling, equipment, or parts; or
512          (B) listing on a government-approved property record if placing a government
513     identification tag on the tooling, equipment, or parts is impractical;
514          (16) sales of newspapers or newspaper subscriptions;
515          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
516     product transferred electronically traded in as full or part payment of the purchase price, except
517     that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
518     trade-ins are limited to other vehicles only, and the tax is based upon:
519          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
520     vehicle being traded in; or
521          (ii) in the absence of a bill of sale or other written evidence of value, the then existing

522     fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
523     commission; and
524          (b) Subsection (17)(a) does not apply to the following items of tangible personal
525     property or products transferred electronically traded in as full or part payment of the purchase
526     price:
527          (i) money;
528          (ii) electricity;
529          (iii) water;
530          (iv) gas; or
531          (v) steam;
532          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
533     or a product transferred electronically used or consumed primarily and directly in farming
534     operations, regardless of whether the tangible personal property or product transferred
535     electronically:
536          (A) becomes part of real estate; or
537          (B) is installed by a:
538          (I) farmer;
539          (II) contractor; or
540          (III) subcontractor; or
541          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
542     product transferred electronically if the tangible personal property or product transferred
543     electronically is exempt under Subsection (18)(a)(i); and
544          (b) amounts paid or charged for the following are subject to the taxes imposed by this
545     chapter:
546          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
547     incidental to farming:
548          (I) machinery;
549          (II) equipment;
550          (III) materials; or
551          (IV) supplies; and
552          (B) tangible personal property that is considered to be used in a manner that is

553     incidental to farming includes:
554          (I) hand tools; or
555          (II) maintenance and janitorial equipment and supplies;
556          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
557     transferred electronically if the tangible personal property or product transferred electronically
558     is used in an activity other than farming; and
559          (B) tangible personal property or a product transferred electronically that is considered
560     to be used in an activity other than farming includes:
561          (I) office equipment and supplies; or
562          (II) equipment and supplies used in:
563          (Aa) the sale or distribution of farm products;
564          (Bb) research; or
565          (Cc) transportation; or
566          (iii) a vehicle required to be registered by the laws of this state during the period
567     ending two years after the date of the vehicle's purchase;
568          (19) sales of hay;
569          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
570     garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
571     garden, farm, or other agricultural produce is sold by:
572          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
573     agricultural produce;
574          (b) an employee of the producer described in Subsection (20)(a); or
575          (c) a member of the immediate family of the producer described in Subsection (20)(a);
576          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
577     under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
578          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
579     nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
580     wholesaler, or retailer for use in packaging tangible personal property to be sold by that
581     manufacturer, processor, wholesaler, or retailer;
582          (23) a product stored in the state for resale;
583          (24) (a) purchases of a product if:

584          (i) the product is:
585          (A) purchased outside of this state;
586          (B) brought into this state:
587          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
588          (II) by a nonresident person who is not living or working in this state at the time of the
589     purchase;
590          (C) used for the personal use or enjoyment of the nonresident person described in
591     Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
592          (D) not used in conducting business in this state; and
593          (ii) for:
594          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
595     the product for a purpose for which the product is designed occurs outside of this state;
596          (B) a boat, the boat is registered outside of this state; or
597          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
598     outside of this state;
599          (b) the exemption provided for in Subsection (24)(a) does not apply to:
600          (i) a lease or rental of a product; or
601          (ii) a sale of a vehicle exempt under Subsection (33); and
602          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
603     purposes of Subsection (24)(a), the commission may by rule define what constitutes the
604     following:
605          (i) conducting business in this state if that phrase has the same meaning in this
606     Subsection (24) as in Subsection (63);
607          (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
608     as in Subsection (63); or
609          (iii) a purpose for which a product is designed if that phrase has the same meaning in
610     this Subsection (24) as in Subsection (63);
611          (25) a product purchased for resale in this state, in the regular course of business, either
612     in its original form or as an ingredient or component part of a manufactured or compounded
613     product;
614          (26) a product upon which a sales or use tax was paid to some other state, or one of its

615     subdivisions, except that the state shall be paid any difference between the tax paid and the tax
616     imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
617     the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
618     Act;
619          (27) any sale of a service described in Subsections 59-12-103(1)(b), (c), and (d) to a
620     person for use in compounding a service taxable under the subsections;
621          (28) purchases made in accordance with the special supplemental nutrition program for
622     women, infants, and children established in 42 U.S.C. Sec. 1786;
623          (29) sales or leases of rolls, rollers, refractory brick, electric motors, or other
624     replacement parts used in the furnaces, mills, or ovens of a steel mill described in SIC Code
625     3312 of the 1987 Standard Industrial Classification Manual of the federal Executive Office of
626     the President, Office of Management and Budget;
627          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
628     Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
629          (a) not registered in this state; and
630          (b) (i) not used in this state; or
631          (ii) used in this state:
632          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
633     time period that does not exceed the longer of:
634          (I) 30 days in any calendar year; or
635          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
636     the borders of this state; or
637          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
638     period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
639     state;
640          (31) sales of aircraft manufactured in Utah;
641          (32) amounts paid for the purchase of telecommunications service for purposes of
642     providing telecommunications service;
643          (33) sales, leases, or uses of the following:
644          (a) a vehicle by an authorized carrier; or
645          (b) tangible personal property that is installed on a vehicle:

646          (i) sold or leased to or used by an authorized carrier; and
647          (ii) before the vehicle is placed in service for the first time;
648          (34) (a) 45% of the sales price of any new manufactured home; and
649          (b) 100% of the sales price of any used manufactured home;
650          (35) sales relating to schools and fundraising sales;
651          (36) sales or rentals of durable medical equipment if:
652          (a) a person presents a prescription for the durable medical equipment; and
653          (b) the durable medical equipment is used for home use only;
654          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
655     Section 72-11-102; and
656          (b) the commission shall by rule determine the method for calculating sales exempt
657     under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
658          (38) sales to a ski resort of:
659          (a) snowmaking equipment;
660          (b) ski slope grooming equipment;
661          (c) passenger ropeways as defined in Section 72-11-102; or
662          (d) parts used in the repairs or renovations of equipment or passenger ropeways
663     described in Subsections (38)(a) through (c);
664          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
665          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
666     amusement, entertainment, or recreation an unassisted amusement device as defined in Section
667     59-12-102;
668          (b) if a seller that sells or rents at the same business location the right to use or operate
669     for amusement, entertainment, or recreation one or more unassisted amusement devices and
670     one or more assisted amusement devices, the exemption described in Subsection (40)(a)
671     applies if the seller separately accounts for the sales or rentals of the right to use or operate for
672     amusement, entertainment, or recreation for the assisted amusement devices; and
673          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
674     Utah Administrative Rulemaking Act, the commission may make rules:
675          (i) governing the circumstances under which sales are at the same business location;
676     and

677          (ii) establishing the procedures and requirements for a seller to separately account for
678     the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
679     assisted amusement devices;
680          (41) (a) sales of photocopies by:
681          (i) a governmental entity; or
682          (ii) an entity within the state system of public education, including:
683          (A) a school; or
684          (B) the State Board of Education; or
685          (b) sales of publications by a governmental entity;
686          (42) amounts paid for admission to an athletic event at an institution of higher
687     education that is subject to the provisions of Title IX of the Education Amendments of 1972,
688     20 U.S.C. Sec. 1681 et seq.;
689          (43) (a) sales made to or by:
690          (i) an area agency on aging; or
691          (ii) a senior citizen center owned by a county, city, or town; or
692          (b) sales made by a senior citizen center that contracts with an area agency on aging;
693          (44) sales or leases of semiconductor fabricating, processing, research, or development
694     materials regardless of whether the semiconductor fabricating, processing, research, or
695     development materials:
696          (a) actually come into contact with a semiconductor; or
697          (b) ultimately become incorporated into real property;
698          (45) an amount paid by or charged to a purchaser for accommodations and services
699     described in Subsection 59-12-103(1)(i) to the extent the amount is exempt under Section
700     59-12-104.2;
701          (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
702     sports event registration certificate in accordance with Section 41-3-306 for the event period
703     specified on the temporary sports event registration certificate;
704          (47) (a) sales or uses of electricity, if the sales or uses are made under a retail tariff
705     adopted by the Public Service Commission only for purchase of electricity produced from a
706     new alternative energy source built after January 1, 2016, as designated in the tariff by the
707     Public Service Commission;

708          (b) for a residential use customer only, the exemption under Subsection (47)(a) applies
709     only to the portion of the tariff rate a customer pays under the tariff described in Subsection
710     (47)(a) that exceeds the tariff rate under the tariff described in Subsection (47)(a) that the
711     customer would have paid absent the tariff;
712          (48) sales or rentals of mobility enhancing equipment if a person presents a
713     prescription for the mobility enhancing equipment;
714          (49) sales of water in a:
715          (a) pipe;
716          (b) conduit;
717          (c) ditch; or
718          (d) reservoir;
719          (50) sales of currency or coins that constitute legal tender of a state, the United States,
720     or a foreign nation;
721          (51) (a) sales of an item described in Subsection (51)(b) if the item:
722          (i) does not constitute legal tender of a state, the United States, or a foreign nation; and
723          (ii) has a gold, silver, or platinum content of 50% or more; and
724          (b) Subsection (51)(a) applies to a gold, silver, or platinum:
725          (i) ingot;
726          (ii) bar;
727          (iii) medallion; or
728          (iv) decorative coin;
729          (52) amounts paid on a sale-leaseback transaction;
730          (53) sales of a prosthetic device:
731          (a) for use on or in a human; and
732          (b) (i) for which a prescription is required; or
733          (ii) if the prosthetic device is purchased by a hospital or other medical facility;
734          (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
735     machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
736     or equipment is primarily used in the production or postproduction of the following media for
737     commercial distribution:
738          (i) a motion picture;

739          (ii) a television program;
740          (iii) a movie made for television;
741          (iv) a music video;
742          (v) a commercial;
743          (vi) a documentary; or
744          (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
745     commission by administrative rule made in accordance with Subsection (54)(d); or
746          (b) purchases, leases, or rentals of machinery or equipment by an establishment
747     described in Subsection (54)(c) that is used for the production or postproduction of the
748     following are subject to the taxes imposed by this chapter:
749          (i) a live musical performance;
750          (ii) a live news program; or
751          (iii) a live sporting event;
752          (c) the following establishments listed in the 1997 North American Industry
753     Classification System of the federal Executive Office of the President, Office of Management
754     and Budget, apply to Subsections (54)(a) and (b):
755          (i) NAICS Code 512110; or
756          (ii) NAICS Code 51219; and
757          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
758     commission may by rule:
759          (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
760     or
761          (ii) define:
762          (A) "commercial distribution";
763          (B) "live musical performance";
764          (C) "live news program"; or
765          (D) "live sporting event";
766          (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
767     on or before June 30, 2027, of tangible personal property that:
768          (i) is leased or purchased for or by a facility that:
769          (A) is an alternative energy electricity production facility;

770          (B) is located in the state; and
771          (C) (I) becomes operational on or after July 1, 2004; or
772          (II) has its generation capacity increased by one or more megawatts on or after July 1,
773     2004, as a result of the use of the tangible personal property;
774          (ii) has an economic life of five or more years; and
775          (iii) is used to make the facility or the increase in capacity of the facility described in
776     Subsection (55)(a)(i) operational up to the point of interconnection with an existing
777     transmission grid including:
778          (A) a wind turbine;
779          (B) generating equipment;
780          (C) a control and monitoring system;
781          (D) a power line;
782          (E) substation equipment;
783          (F) lighting;
784          (G) fencing;
785          (H) pipes; or
786          (I) other equipment used for locating a power line or pole; and
787          (b) this Subsection (55) does not apply to:
788          (i) tangible personal property used in construction of:
789          (A) a new alternative energy electricity production facility; or
790          (B) the increase in the capacity of an alternative energy electricity production facility;
791          (ii) contracted services required for construction and routine maintenance activities;
792     and
793          (iii) unless the tangible personal property is used or acquired for an increase in capacity
794     of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal property used or
795     acquired after:
796          (A) the alternative energy electricity production facility described in Subsection
797     (55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
798          (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
799     in Subsection (55)(a)(iii);
800          (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but

801     on or before June 30, 2027, of tangible personal property that:
802          (i) is leased or purchased for or by a facility that:
803          (A) is a waste energy production facility;
804          (B) is located in the state; and
805          (C) (I) becomes operational on or after July 1, 2004; or
806          (II) has its generation capacity increased by one or more megawatts on or after July 1,
807     2004, as a result of the use of the tangible personal property;
808          (ii) has an economic life of five or more years; and
809          (iii) is used to make the facility or the increase in capacity of the facility described in
810     Subsection (56)(a)(i) operational up to the point of interconnection with an existing
811     transmission grid including:
812          (A) generating equipment;
813          (B) a control and monitoring system;
814          (C) a power line;
815          (D) substation equipment;
816          (E) lighting;
817          (F) fencing;
818          (G) pipes; or
819          (H) other equipment used for locating a power line or pole; and
820          (b) this Subsection (56) does not apply to:
821          (i) tangible personal property used in construction of:
822          (A) a new waste energy facility; or
823          (B) the increase in the capacity of a waste energy facility;
824          (ii) contracted services required for construction and routine maintenance activities;
825     and
826          (iii) unless the tangible personal property is used or acquired for an increase in capacity
827     described in Subsection (56)(a)(i)(C)(II), tangible personal property used or acquired after:
828          (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
829     described in Subsection (56)(a)(iii); or
830          (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
831     in Subsection (56)(a)(iii);

832          (57) (a) leases of five or more years or purchases made on or after July 1, 2004, but on
833     or before June 30, 2027, of tangible personal property that:
834          (i) is leased or purchased for or by a facility that:
835          (A) is located in the state;
836          (B) produces fuel from alternative energy, including:
837          (I) methanol; or
838          (II) ethanol; and
839          (C) (I) becomes operational on or after July 1, 2004; or
840          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
841     a result of the installation of the tangible personal property;
842          (ii) has an economic life of five or more years; and
843          (iii) is installed on the facility described in Subsection (57)(a)(i);
844          (b) this Subsection (57) does not apply to:
845          (i) tangible personal property used in construction of:
846          (A) a new facility described in Subsection (57)(a)(i); or
847          (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
848          (ii) contracted services required for construction and routine maintenance activities;
849     and
850          (iii) unless the tangible personal property is used or acquired for an increase in capacity
851     described in Subsection (57)(a)(i)(C)(II), tangible personal property used or acquired after:
852          (A) the facility described in Subsection (57)(a)(i) is operational; or
853          (B) the increased capacity described in Subsection (57)(a)(i) is operational;
854          (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
855     product transferred electronically to a person within this state if that tangible personal property
856     or product transferred electronically is subsequently shipped outside the state and incorporated
857     pursuant to contract into and becomes a part of real property located outside of this state;
858          (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
859     state or political entity to which the tangible personal property is shipped imposes a sales, use,
860     gross receipts, or other similar transaction excise tax on the transaction against which the other
861     state or political entity allows a credit for sales and use taxes imposed by this chapter; and
862          (c) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund,

863     a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
864     refund:
865          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
866          (ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
867     which the sale is made;
868          (iii) if the person did not claim the exemption allowed by this Subsection (58) for the
869     sale prior to filing for the refund;
870          (iv) for sales and use taxes paid under this chapter on the sale;
871          (v) in accordance with Section 59-1-1410; and
872          (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410, if
873     the person files for the refund on or before June 30, 2011;
874          (59) purchases:
875          (a) of one or more of the following items in printed or electronic format:
876          (i) a list containing information that includes one or more:
877          (A) names; or
878          (B) addresses; or
879          (ii) a database containing information that includes one or more:
880          (A) names; or
881          (B) addresses; and
882          (b) used to send direct mail;
883          (60) redemptions or repurchases of a product by a person if that product was:
884          (a) delivered to a pawnbroker as part of a pawn transaction; and
885          (b) redeemed or repurchased within the time period established in a written agreement
886     between the person and the pawnbroker for redeeming or repurchasing the product;
887          (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
888          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
889     and
890          (ii) has a useful economic life of one or more years; and
891          (b) the following apply to Subsection (61)(a):
892          (i) telecommunications enabling or facilitating equipment, machinery, or software;
893          (ii) telecommunications equipment, machinery, or software required for 911 service;

894          (iii) telecommunications maintenance or repair equipment, machinery, or software;
895          (iv) telecommunications switching or routing equipment, machinery, or software; or
896          (v) telecommunications transmission equipment, machinery, or software;
897          (62) (a) beginning on July 1, 2006, and ending on June 30, 2027, purchases of tangible
898     personal property or a product transferred electronically that are used in the research and
899     development of alternative energy technology; and
900          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
901     commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
902     purchases of tangible personal property or a product transferred electronically that are used in
903     the research and development of alternative energy technology;
904          (63) (a) purchases of tangible personal property or a product transferred electronically
905     if:
906          (i) the tangible personal property or product transferred electronically is:
907          (A) purchased outside of this state;
908          (B) brought into this state at any time after the purchase described in Subsection
909     (63)(a)(i)(A); and
910          (C) used in conducting business in this state; and
911          (ii) for:
912          (A) tangible personal property or a product transferred electronically other than the
913     tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
914     for a purpose for which the property is designed occurs outside of this state; or
915          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
916     outside of this state;
917          (b) the exemption provided for in Subsection (63)(a) does not apply to:
918          (i) a lease or rental of tangible personal property or a product transferred electronically;
919     or
920          (ii) a sale of a vehicle exempt under Subsection (33); and
921          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
922     purposes of Subsection (63)(a), the commission may by rule define what constitutes the
923     following:
924          (i) conducting business in this state if that phrase has the same meaning in this

925     Subsection (63) as in Subsection (24);
926          (ii) the first use of tangible personal property or a product transferred electronically if
927     that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
928          (iii) a purpose for which tangible personal property or a product transferred
929     electronically is designed if that phrase has the same meaning in this Subsection (63) as in
930     Subsection (24);
931          (64) sales of disposable home medical equipment or supplies if:
932          (a) a person presents a prescription for the disposable home medical equipment or
933     supplies;
934          (b) the disposable home medical equipment or supplies are used exclusively by the
935     person to whom the prescription described in Subsection (64)(a) is issued; and
936          (c) the disposable home medical equipment and supplies are listed as eligible for
937     payment under:
938          (i) Title XVIII, federal Social Security Act; or
939          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
940          (65) sales:
941          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
942     District Act; or
943          (b) of tangible personal property to a subcontractor of a public transit district, if the
944     tangible personal property is:
945          (i) clearly identified; and
946          (ii) installed or converted to real property owned by the public transit district;
947          (66) sales of construction materials:
948          (a) purchased on or after July 1, 2010;
949          (b) purchased by, on behalf of, or for the benefit of an international airport:
950          (i) located within a county of the first class; and
951          (ii) that has a United States customs office on its premises; and
952          (c) if the construction materials are:
953          (i) clearly identified;
954          (ii) segregated; and
955          (iii) installed or converted to real property:

956          (A) owned or operated by the international airport described in Subsection (66)(b); and
957          (B) located at the international airport described in Subsection (66)(b);
958          (67) sales of construction materials:
959          (a) purchased on or after July 1, 2008;
960          (b) purchased by, on behalf of, or for the benefit of a new airport:
961          (i) located within a county of the second class; and
962          (ii) that is owned or operated by a city in which an airline as defined in Section
963     59-2-102 is headquartered; and
964          (c) if the construction materials are:
965          (i) clearly identified;
966          (ii) segregated; and
967          (iii) installed or converted to real property:
968          (A) owned or operated by the new airport described in Subsection (67)(b);
969          (B) located at the new airport described in Subsection (67)(b); and
970          (C) as part of the construction of the new airport described in Subsection (67)(b);
971          (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
972          (69) purchases and sales described in Section 63H-4-111;
973          (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
974     overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
975     a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
976     lists a state or country other than this state as the location of registry of the fixed wing turbine
977     powered aircraft; or
978          (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
979     provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
980     a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
981     lists a state or country other than this state as the location of registry of the fixed wing turbine
982     powered aircraft;
983          (71) subject to Section 59-12-104.4, sales of a textbook for a higher education course:
984          (a) to a person admitted to an institution of higher education; and
985          (b) by a seller, other than a bookstore owned by an institution of higher education, if
986     51% or more of that seller's sales revenue for the previous calendar quarter are sales of a

987     textbook for a higher education course;
988          (72) a license fee or tax a municipality imposes in accordance with Subsection
989     10-1-203(5) on a purchaser from a business for which the municipality provides an enhanced
990     level of municipal services;
991          (73) amounts paid or charged for construction materials used in the construction of a
992     new or expanding life science research and development facility in the state, if the construction
993     materials are:
994          (a) clearly identified;
995          (b) segregated; and
996          (c) installed or converted to real property;
997          (74) amounts paid or charged for:
998          (a) a purchase or lease of machinery and equipment that:
999          (i) are used in performing qualified research:
1000          (A) as defined in Section 41(d), Internal Revenue Code; and
1001          (B) in the state; and
1002          (ii) have an economic life of three or more years; and
1003          (b) normal operating repair or replacement parts:
1004          (i) for the machinery and equipment described in Subsection (74)(a); and
1005          (ii) that have an economic life of three or more years;
1006          (75) a sale or lease of tangible personal property used in the preparation of prepared
1007     food if:
1008          (a) for a sale:
1009          (i) the ownership of the seller and the ownership of the purchaser are identical; and
1010          (ii) the seller or the purchaser paid a tax under this chapter on the purchase of that
1011     tangible personal property prior to making the sale; or
1012          (b) for a lease:
1013          (i) the ownership of the lessor and the ownership of the lessee are identical; and
1014          (ii) the lessor or the lessee paid a tax under this chapter on the purchase of that tangible
1015     personal property prior to making the lease;
1016          (76) (a) purchases of machinery or equipment if:
1017          (i) the purchaser is an establishment described in NAICS Subsector 713, Amusement,

1018     Gambling, and Recreation Industries, of the 2012 North American Industry Classification
1019     System of the federal Executive Office of the President, Office of Management and Budget;
1020          (ii) the machinery or equipment:
1021          (A) has an economic life of three or more years; and
1022          (B) is used by one or more persons who pay admission or user fees described in
1023     Subsection 59-12-103(1)(f) to the purchaser of the machinery and equipment; and
1024          (iii) 51% or more of the purchaser's sales revenue for the previous calendar quarter is:
1025          (A) amounts paid or charged as admission or user fees described in Subsection
1026     59-12-103(1)(f); and
1027          (B) subject to taxation under this chapter; and
1028          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1029     commission may make rules for verifying that 51% of a purchaser's sales revenue for the
1030     previous calendar quarter is:
1031          (i) amounts paid or charged as admission or user fees described in Subsection
1032     59-12-103(1)(f); and
1033          (ii) subject to taxation under this chapter;
1034          (77) purchases of a short-term lodging consumable by a business that provides
1035     accommodations and services described in Subsection 59-12-103(1)(i);
1036          (78) amounts paid or charged to access a database:
1037          (a) if the primary purpose for accessing the database is to view or retrieve information
1038     from the database; and
1039          (b) not including amounts paid or charged for a:
1040          (i) digital audiowork;
1041          (ii) digital audio-visual work; or
1042          (iii) digital book;
1043          (79) amounts paid or charged for a purchase or lease made by an electronic financial
1044     payment service, of:
1045          (a) machinery and equipment that:
1046          (i) are used in the operation of the electronic financial payment service; and
1047          (ii) have an economic life of three or more years; and
1048          (b) normal operating repair or replacement parts that:

1049          (i) are used in the operation of the electronic financial payment service; and
1050          (ii) have an economic life of three or more years;
1051          (80) beginning on April 1, 2013, sales of a fuel cell as defined in Section 54-15-102;
1052          (81) amounts paid or charged for a purchase or lease of tangible personal property or a
1053     product transferred electronically if the tangible personal property or product transferred
1054     electronically:
1055          (a) is stored, used, or consumed in the state; and
1056          (b) is temporarily brought into the state from another state:
1057          (i) during a disaster period as defined in Section 53-2a-1202;
1058          (ii) by an out-of-state business as defined in Section 53-2a-1202;
1059          (iii) for a declared state disaster or emergency as defined in Section 53-2a-1202; and
1060          (iv) for disaster- or emergency-related work as defined in Section 53-2a-1202;
1061          (82) sales of goods and services at a morale, welfare, and recreation facility, as defined
1062     in Section 39-9-102, made pursuant to Title 39, Chapter 9, State Morale, Welfare, and
1063     Recreation Program;
1064          (83) amounts paid or charged for a purchase or lease of molten magnesium;
1065          (84) (a) except as provided in Subsection (84)(b), amounts paid or charged for a
1066     purchase or lease made by a drilling equipment manufacturer of machinery, equipment,
1067     materials, or normal operating repair or replacement parts:
1068          (i) that are used or consumed exclusively in the drilling equipment manufacturer's
1069     manufacturing process; and
1070          (ii) except for office:
1071          (A) equipment; or
1072          (B) supplies; and
1073          (b) beginning on July 1, 2015, and ending on June 30, 2017, a person may claim an
1074     exemption described in Subsection (84)(a) only by filing for a refund:
1075          (i) of 50% of the tax paid on the amounts paid or charged; and
1076          (ii) in accordance with Section 59-1-1410; [and]
1077          (85) amounts paid or charged for a purchase or lease made by a qualifying enterprise
1078     data center of machinery, equipment, or normal operating repair or replacement parts, if the
1079     machinery, equipment, or normal operating repair or replacement parts:

1080          (a) are used in the operation of the establishment; and
1081          (b) have an economic life of one or more years[.]; and
1082          (86) Ĥ→ [
(a) subject to Subsection (86)(b),] ←Ĥ amounts paid or charged for a purchase or
1082a     lease
1083     made by a person located in a recycling market development zone designated under Section
1084     63N-2-404 for machinery and equipment Ĥ→ :
1084a      (a) ←Ĥ used in the recycling market development zone
1085     directly in:
1086          (i) commercial composting; or
1087          (ii) manufacturing facilities or plant units that:
1088          (A) manufacture, process, compound, or produce recycled items of tangible personal
1089     property for sale; or
1090          (B) reduce or reuse postconsumer waste material; and
1091          (b) Ĥ→ [
before a person is allowed an exemption under this Subsection (86),] if ←Ĥ the
1091a     person
1092     Ĥ→ [
shall obtain] has obtained ←Ĥ a form certified by the Governor's Office of Economic
1092a     Development under Section
1093     63N-2-410 that the machinery is integral to the composting or recycling process.
1094          Section 6. Section 63I-1-263 is amended to read:
1095          63I-1-263. Repeal dates, Titles 63A to 63N.
1096          (1) Subsection 63A-5-104(4)(h) is repealed on July 1, 2024.
1097          (2) Section 63A-5-603, State Facility Energy Efficiency Fund, is repealed July 1, 2023.
1098          (3) Title 63C, Chapter 4a, Constitutional and Federalism Defense Act, is repealed July
1099     1, 2018.
1100          (4) Title 63C, Chapter 4b, Commission for the Stewardship of Public Lands, is
1101     repealed November 30, 2019.
1102          (5) Title 63C, Chapter 16, Prison Development Commission Act, is repealed July 1,
1103     2020.
1104          (6) Title 63C, Chapter 17, Point of the Mountain Development Commission Act, is
1105     repealed July 1, 2021.
1106          (7) Title 63H, Chapter 4, Heber Valley Historic Railroad Authority, is repealed July 1,
1107     2020.
1108          (8) Title 63H, Chapter 8, Utah Housing Corporation Act, is repealed July 1, 2026.
1109          (9) On July 1, 2025:
1110          (a) in Subsection 17-27a-404(3)(c)(ii), the language that states "the Resource

1111     Development Coordinating Committee," is repealed;
1112          (b) Subsection 23-14-21(2)(c) is amended to read "(c) provide notification of proposed
1113     sites for the transplant of species to local government officials having jurisdiction over areas
1114     that may be affected by a transplant.";
1115          (c) in Subsection 23-14-21(3), the language that states "and the Resource Development
1116     Coordinating Committee" is repealed;
1117          (d) in Subsection 23-21-2.3(1), the language that states "the Resource Development
1118     Coordinating Committee created in Section 63J-4-501 and" is repealed;
1119          (e) in Subsection 23-21-2.3(2), the language that states "the Resource Development
1120     Coordinating Committee and" is repealed;
1121          (f) Subsection 63J-4-102(1) is repealed and the remaining subsections are renumbered
1122     accordingly;
1123          (g) Subsections 63J-4-401(5)(a) and (c) are repealed;
1124          (h) Subsection 63J-4-401(5)(b) is renumbered to Subsection 63J-4-401(5)(a) and the
1125     word "and" is inserted immediately after the semicolon;
1126          (i) Subsection 63J-4-401(5)(d) is renumbered to Subsection 63J-4-401(5)(b);
1127          (j) Sections 63J-4-501, 63J-4-502, 63J-4-503, 63J-4-504, and 63J-4-505 are repealed;
1128     and
1129          (k) Subsection 63J-4-603(1)(e)(iv) is repealed and the remaining subsections are
1130     renumbered accordingly.
1131          (10) The Crime Victim Reparations and Assistance Board, created in Section
1132     63M-7-504, is repealed July 1, 2017.
1133          (11) Title 63M, Chapter 11, Utah Commission on Aging, is repealed July 1, 2017.
1134          (12) Title 63N, Chapter 2, Part 2, Enterprise Zone Act, is repealed July 1, 2018.
1135          (13) [(a)] Title 63N, Chapter 2, Part 4, Recycling Market Development Zone Act, is
1136     repealed January 1, 2021.
1137          [(b) Subject to Subsection (13)(c), Sections 59-7-610 and 59-10-1007 regarding tax
1138     credits for certain persons in recycling market development zones, are repealed for taxable
1139     years beginning on or after January 1, 2021.]
1140          [(c) A person may not claim a tax credit under Section 59-7-610 or 59-10-1007:]
1141          [(i) for the purchase price of machinery or equipment described in Section 59-7-610 or

1142     59-10-1007, if the machinery or equipment is purchased on or after January 1, 2021; or]
1143          [(ii) for an expenditure described in Subsection 59-7-610(1)(b) or 59-10-1007(1)(b), if
1144     the expenditure is made on or after January 1, 2021.]
1145          [(d) Notwithstanding Subsections (13)(b) and (c), a person may carry forward a tax
1146     credit in accordance with Section 59-7-610 or 59-10-1007 if:]
1147          [(i) the person is entitled to a tax credit under Section 59-7-610 or 59-10-1007; and]
1148          [(ii) (A) for the purchase price of machinery or equipment described in Section
1149     59-7-610 or 59-10-1007, the machinery or equipment is purchased on or before December 31,
1150     2020; or]
1151          [(B) for an expenditure described in Subsection 59-7-610(1)(b) or 59-10-1007(1)(b),
1152     the expenditure is made on or before December 31, 2020.]
1153          (14) Section 63N-2-512 is repealed on July 1, 2021.
1154          (15) (a) Title 63N, Chapter 2, Part 6, Utah Small Business Jobs Act, is repealed
1155     January 1, 2021.
1156          (b) Section 59-9-107 regarding tax credits against premium taxes is repealed for
1157     calendar years beginning on or after January 1, 2021.
1158          (c) Notwithstanding Subsection (15)(b), an entity may carry forward a tax credit in
1159     accordance with Section 59-9-107 if:
1160          (i) the person is entitled to a tax credit under Section 59-9-107 on or before December
1161     31, 2020; and
1162          (ii) the qualified equity investment that is the basis of the tax credit is certified under
1163     Section 63N-2-603 on or before December 31, 2023.
1164          (16) Title 63N, Chapter 12, Part 3, Utah Broadband Outreach Center, is repealed July
1165     1, 2018.
1166          Section 7. Section 63I-2-259 is amended to read:
1167          63I-2-259. Repeal dates -- Title 59.
1168          (1) Subsection 59-2-919(10) is repealed December 31, 2015.
1169          (2) Subsection 59-2-919.1(4) is repealed December 31, 2015.
1170          (3) Subsection 59-2-1007(14) is repealed on December 31, 2018.
1171          (4) Section 59-7-610 is repealed on December 31, 2020.
1172          (5) Section 59-10-1007 is repealed on December 31, 2020.

1173          Section 8. Section 63I-2-263 is amended to read:
1174          63I-2-263. Repeal dates, Title 63A to Title 63N.
1175          (1) Section 63A-5-227 is repealed on January 1, 2018.
1176          (2) On December 31, 2020, the language in Subsection 63N-2-304(1)(b) that states
1177     "59-7-610, 59-10-1007, or" is repealed.
1178          [(2)] (3) Subsection 63N-3-109(2)(f)(i)(B) is repealed July 1, 2020.
1179          [(3)] (4) Section 63N-3-110 is repealed July 1, 2020.
1180          Section 9. Section 63N-2-402 is amended to read:
1181          63N-2-402. Definitions.
1182          As used in this part:
1183          (1) "Composting" means the controlled decay of landscape waste or sewage sludge and
1184     organic industrial waste, or a mixture of these, by the action of bacteria, fungi, molds, and other
1185     organisms.
1186          (2) "Postconsumer waste material" means any product generated by a business or
1187     consumer that has served its intended end use, and that has been separated from solid waste for
1188     the purposes of collection, recycling, and disposition and that does not include secondary waste
1189     material.
1190          (3) (a) "Recovered materials" means waste materials and by-products that have been
1191     recovered or diverted from solid waste.
1192          (b) "Recovered materials" does not include those materials and by-products generated
1193     from, and commonly reused within, an original manufacturing process.
1194          (4) (a) "Recycling" means the diversion of materials from the solid waste stream and
1195     the beneficial use of the materials and includes a series of activities by which materials that
1196     would become or otherwise remain waste are diverted from the waste stream for collection,
1197     separation, and processing, and are used as raw materials or feedstocks in lieu of or in addition
1198     to virgin materials in the manufacture of goods sold or distributed in commerce or the reuse of
1199     the materials as substitutes for goods made from virgin materials.
1200          (b) "Recycling" does not include burning municipal solid waste for energy recovery.
1201          (5) "Recycling market development zone" or "zone" means an area designated by the
1202     office as meeting the requirements of this part.
1203          (6) (a) "Secondary waste material" means industrial by-products that go to disposal

1204     facilities and waste generated after completion of a manufacturing process.
1205          (b) "Secondary waste material" does not include internally generated scrap commonly
1206     returned to industrial or manufacturing processes, such as home scrap and mill broke.
1207          [(7) "Tax incentive" means a nonrefundable tax credit available under Section 59-7-610
1208     or 59-10-1007.]
1209          Section 10. Section 63N-2-410 is amended to read:
1210          63N-2-410. Recycling market development zone credit.
1211          (1) For a taxpayer within a recycling market development zone, there [are allowed the
1212     nonrefundable credits against tax as provided by Sections 59-7-610 and 59-10-1007] is a sales
1213     and use tax exemption for machinery and equipment used in the recycling market development
1214     zone as provided in Subsection 59-12-104(86).
1215          (2) The office shall certify that the machinery and equipment used by a taxpayer
1216     located within a recycling market development Ĥ→ zone ←Ĥ are integral to the composting and
1216a     recycling
1217     process:
1218          (a) on a form provided by the Ĥ→ State ←Ĥ Tax Commission that shall be retained by the
1218a     taxpayer
1219     claiming the sales and use tax exemption under Subsection 59-12-104(86); and
1220          (b) before a taxpayer is allowed the sales and use tax exemption under Subsection
1221     59-12-104(86).
1222          Section 11. Effective date.
1223          (1) Except as provided in Subsection (2), this bill takes effect on January 1, 2018.
1224          (2) The actions Ĥ→ [
affect] affecting ←Ĥ the following sections take effect for a taxable
1224a     year beginning on
1225     or after January 1, 2018:
1226          (a) Section 59-7-610; and
1227          (b) Section 59-10-1007.