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7 LONG TITLE
8 General Description:
9 This bill modifies provisions relating to a sales and use tax exemption for certain
10 refineries.
11 Highlighted Provisions:
12 This bill:
13 ▸ provides definitions;
14 ▸ provides a sales and use tax exemption for amounts paid or charged for a purchase
15 or lease of machinery, equipment, normal operating repair or replacement parts,
16 catalysts, chemicals, reagents, solutions, or supplies by a refiner;
17 ▸ provides that beginning on a certain date, a refiner that seeks to be eligible for the
18 sales and use tax exemption shall annually report certain information to the Office of
19 Energy Development;
20 ▸ requires the Office of Energy Development to annually certify that the refiner is
21 eligible for the sales and use tax exemption if the refiner's refinery that is located
22 within the state meets certain fuel standards;
23 ▸ grants the Office of Energy Development rulemaking authority to administer the
24 certification requirements; and
25 ▸ makes technical and conforming changes.
26 Money Appropriated in this Bill:
27 None
28 Other Special Clauses:
29 This bill provides a special effective date.
30 Utah Code Sections Affected:
31 AMENDS:
32 59-12-104, as last amended by Laws of Utah 2016, Third Special Session, Chapter 6
33 ENACTS:
34 63M-4-701, Utah Code Annotated 1953
35 63M-4-702, Utah Code Annotated 1953
36
37 Be it enacted by the Legislature of the state of Utah:
38 Section 1. Section 59-12-104 is amended to read:
39 59-12-104. Exemptions.
40 Exemptions from the taxes imposed by this chapter are as follows:
41 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
42 under Chapter 13, Motor and Special Fuel Tax Act;
43 (2) subject to Section 59-12-104.6, sales to the state, its institutions, and its political
44 subdivisions; however, this exemption does not apply to sales of:
45 (a) construction materials except:
46 (i) construction materials purchased by or on behalf of institutions of the public
47 education system as defined in Utah Constitution, Article X, Section 2, provided the
48 construction materials are clearly identified and segregated and installed or converted to real
49 property which is owned by institutions of the public education system; and
50 (ii) construction materials purchased by the state, its institutions, or its political
51 subdivisions which are installed or converted to real property by employees of the state, its
52 institutions, or its political subdivisions; or
53 (b) tangible personal property in connection with the construction, operation,
54 maintenance, repair, or replacement of a project, as defined in Section 11-13-103, or facilities
55 providing additional project capacity, as defined in Section 11-13-103;
56 (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
57 (i) the proceeds of each sale do not exceed $1; and
58 (ii) the seller or operator of the vending machine reports an amount equal to 150% of
59 the cost of the item described in Subsection (3)(b) as goods consumed; and
60 (b) Subsection (3)(a) applies to:
61 (i) food and food ingredients; or
62 (ii) prepared food;
63 (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
64 (i) alcoholic beverages;
65 (ii) food and food ingredients; or
66 (iii) prepared food;
67 (b) sales of tangible personal property or a product transferred electronically:
68 (i) to a passenger;
69 (ii) by a commercial airline carrier; and
70 (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
71 (c) services related to Subsection (4)(a) or (b);
72 (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
73 and equipment:
74 (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
75 North American Industry Classification System of the federal Executive Office of the President,
76 Office of Management and Budget; and
77 (II) for:
78 (Aa) installation in an aircraft, including services relating to the installation of parts or
79 equipment in the aircraft;
80 (Bb) renovation of an aircraft; or
81 (Cc) repair of an aircraft; or
82 (B) for installation in an aircraft operated by a common carrier in interstate or foreign
83 commerce; or
84 (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
85 aircraft operated by a common carrier in interstate or foreign commerce; and
86 (b) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund, a
87 person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
88 refund:
89 (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
90 (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
91 (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for the
92 sale prior to filing for the refund;
93 (iv) for sales and use taxes paid under this chapter on the sale;
94 (v) in accordance with Section 59-1-1410; and
95 (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410, if
96 the person files for the refund on or before September 30, 2011;
97 (6) sales of commercials, motion picture films, prerecorded audio program tapes or
98 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
99 exhibitor, distributor, or commercial television or radio broadcaster;
100 (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
101 property if the cleaning or washing of the tangible personal property is not assisted cleaning or
102 washing of tangible personal property;
103 (b) if a seller that sells at the same business location assisted cleaning or washing of
104 tangible personal property and cleaning or washing of tangible personal property that is not
105 assisted cleaning or washing of tangible personal property, the exemption described in
106 Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning or
107 washing of the tangible personal property; and
108 (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
109 Utah Administrative Rulemaking Act, the commission may make rules:
110 (i) governing the circumstances under which sales are at the same business location; and
111 (ii) establishing the procedures and requirements for a seller to separately account for
112 sales of assisted cleaning or washing of tangible personal property;
113 (8) sales made to or by religious or charitable institutions in the conduct of their regular
114 religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
115 fulfilled;
116 (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
117 this state if the vehicle is:
118 (a) not registered in this state; and
119 (b) (i) not used in this state; or
120 (ii) used in this state:
121 (A) if the vehicle is not used to conduct business, for a time period that does not exceed
122 the longer of:
123 (I) 30 days in any calendar year; or
124 (II) the time period necessary to transport the vehicle to the borders of this state; or
125 (B) if the vehicle is used to conduct business, for the time period necessary to transport
126 the vehicle to the borders of this state;
127 (10) (a) amounts paid for an item described in Subsection (10)(b) if:
128 (i) the item is intended for human use; and
129 (ii) (A) a prescription was issued for the item; or
130 (B) the item was purchased by a hospital or other medical facility; and
131 (b) (i) Subsection (10)(a) applies to:
132 (A) a drug;
133 (B) a syringe; or
134 (C) a stoma supply; and
135 (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
136 commission may by rule define the terms:
137 (A) "syringe"; or
138 (B) "stoma supply";
139 (11) purchases or leases exempt under Section 19-12-201;
140 (12) (a) sales of an item described in Subsection (12)(c) served by:
141 (i) the following if the item described in Subsection (12)(c) is not available to the
142 general public:
143 (A) a church; or
144 (B) a charitable institution;
145 (ii) an institution of higher education if:
146 (A) the item described in Subsection (12)(c) is not available to the general public; or
147 (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
148 offered by the institution of higher education; or
149 (b) sales of an item described in Subsection (12)(c) provided for a patient by:
150 (i) a medical facility; or
151 (ii) a nursing facility; and
152 (c) Subsections (12)(a) and (b) apply to:
153 (i) food and food ingredients;
154 (ii) prepared food; or
155 (iii) alcoholic beverages;
156 (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
157 or a product transferred electronically by a person:
158 (i) regardless of the number of transactions involving the sale of that tangible personal
159 property or product transferred electronically by that person; and
160 (ii) not regularly engaged in the business of selling that type of tangible personal
161 property or product transferred electronically;
162 (b) this Subsection (13) does not apply if:
163 (i) the sale is one of a series of sales of a character to indicate that the person is
164 regularly engaged in the business of selling that type of tangible personal property or product
165 transferred electronically;
166 (ii) the person holds that person out as regularly engaged in the business of selling that
167 type of tangible personal property or product transferred electronically;
168 (iii) the person sells an item of tangible personal property or product transferred
169 electronically that the person purchased as a sale that is exempt under Subsection (25); or
170 (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
171 this state in which case the tax is based upon:
172 (A) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
173 or
174 (B) in the absence of a bill of sale or other written evidence of value, the fair market
175 value of the vehicle or vessel being sold at the time of the sale as determined by the commission;
176 and
177 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
178 commission shall make rules establishing the circumstances under which:
179 (i) a person is regularly engaged in the business of selling a type of tangible personal
180 property or product transferred electronically;
181 (ii) a sale of tangible personal property or a product transferred electronically is one of a
182 series of sales of a character to indicate that a person is regularly engaged in the business of
183 selling that type of tangible personal property or product transferred electronically; or
184 (iii) a person holds that person out as regularly engaged in the business of selling a type
185 of tangible personal property or product transferred electronically;
186 (14) (a) amounts paid or charged for a purchase or lease:
187 (i) by a manufacturing facility located in the state; and
188 (ii) of machinery, equipment, or normal operating repair or replacement parts if the
189 machinery, equipment, or normal operating repair or replacement parts have an economic life of
190 three or more years and are used:
191 (A) in the manufacturing process to manufacture an item sold as tangible personal
192 property; or
193 (B) for a scrap recycler, to process an item sold as tangible personal property;
194 (b) amounts paid or charged for a purchase or lease:
195 (i) by an establishment:
196 (A) described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS Code
197 213113, Support Activities for Coal Mining, 213114, Support Activities for Metal Mining, or
198 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining, of the 2002 North
199 American Industry Classification System of the federal Executive Office of the President, Office
200 of Management and Budget; and
201 (B) located in the state; and
202 (ii) of machinery, equipment, or normal operating repair or replacement parts if the
203 machinery, equipment, or normal operating repair or replacement parts have an economic life of
204 three or more years and are used in:
205 (A) the production process to produce an item sold as tangible personal property;
206 (B) research and development;
207 (C) transporting, storing, or managing tailings, overburden, or similar waste materials
208 produced from mining;
209 (D) developing or maintaining a road, tunnel, excavation, or similar feature used in
210 mining; or
211 (E) preventing, controlling, or reducing dust or other pollutants from mining;
212 (c) amounts paid or charged for a purchase or lease:
213 (i) by an establishment:
214 (A) described in NAICS Code 518112, Web Search Portals, of the 2002 North
215 American Industry Classification System of the federal Executive Office of the President, Office
216 of Management and Budget; and
217 (B) located in the state; and
218 (ii) of machinery, equipment, or normal operating repair or replacement parts if the
219 machinery, equipment, or normal operating repair or replacement parts:
220 (A) are used in the operation of the web search portal; and
221 (B) have an economic life of three or more years; and
222 (d) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
223 Utah Administrative Rulemaking Act, the commission:
224 (i) shall by rule define the term "establishment"; and
225 (ii) may by rule define what constitutes:
226 (A) processing an item sold as tangible personal property;
227 (B) the production process, to produce an item sold as tangible personal property; or
228 (C) research and development;
229 (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
230 (i) tooling;
231 (ii) special tooling;
232 (iii) support equipment;
233 (iv) special test equipment; or
234 (v) parts used in the repairs or renovations of tooling or equipment described in
235 Subsections (15)(a)(i) through (iv); and
236 (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
237 (i) the tooling, equipment, or parts are used or consumed exclusively in the performance
238 of any aerospace or electronics industry contract with the United States government or any
239 subcontract under that contract; and
240 (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
241 title to the tooling, equipment, or parts is vested in the United States government as evidenced
242 by:
243 (A) a government identification tag placed on the tooling, equipment, or parts; or
244 (B) listing on a government-approved property record if placing a government
245 identification tag on the tooling, equipment, or parts is impractical;
246 (16) sales of newspapers or newspaper subscriptions;
247 (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
248 product transferred electronically traded in as full or part payment of the purchase price, except
249 that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
250 trade-ins are limited to other vehicles only, and the tax is based upon:
251 (i) the bill of sale or other written evidence of value of the vehicle being sold and the
252 vehicle being traded in; or
253 (ii) in the absence of a bill of sale or other written evidence of value, the then existing
254 fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
255 commission; and
256 (b) Subsection (17)(a) does not apply to the following items of tangible personal
257 property or products transferred electronically traded in as full or part payment of the purchase
258 price:
259 (i) money;
260 (ii) electricity;
261 (iii) water;
262 (iv) gas; or
263 (v) steam;
264 (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
265 or a product transferred electronically used or consumed primarily and directly in farming
266 operations, regardless of whether the tangible personal property or product transferred
267 electronically:
268 (A) becomes part of real estate; or
269 (B) is installed by a:
270 (I) farmer;
271 (II) contractor; or
272 (III) subcontractor; or
273 (ii) sales of parts used in the repairs or renovations of tangible personal property or a
274 product transferred electronically if the tangible personal property or product transferred
275 electronically is exempt under Subsection (18)(a)(i); and
276 (b) amounts paid or charged for the following are subject to the taxes imposed by this
277 chapter:
278 (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
279 incidental to farming:
280 (I) machinery;
281 (II) equipment;
282 (III) materials; or
283 (IV) supplies; and
284 (B) tangible personal property that is considered to be used in a manner that is
285 incidental to farming includes:
286 (I) hand tools; or
287 (II) maintenance and janitorial equipment and supplies;
288 (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
289 transferred electronically if the tangible personal property or product transferred electronically is
290 used in an activity other than farming; and
291 (B) tangible personal property or a product transferred electronically that is considered
292 to be used in an activity other than farming includes:
293 (I) office equipment and supplies; or
294 (II) equipment and supplies used in:
295 (Aa) the sale or distribution of farm products;
296 (Bb) research; or
297 (Cc) transportation; or
298 (iii) a vehicle required to be registered by the laws of this state during the period ending
299 two years after the date of the vehicle's purchase;
300 (19) sales of hay;
301 (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
302 garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
303 garden, farm, or other agricultural produce is sold by:
304 (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
305 agricultural produce;
306 (b) an employee of the producer described in Subsection (20)(a); or
307 (c) a member of the immediate family of the producer described in Subsection (20)(a);
308 (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
309 under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
310 (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
311 nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
312 wholesaler, or retailer for use in packaging tangible personal property to be sold by that
313 manufacturer, processor, wholesaler, or retailer;
314 (23) a product stored in the state for resale;
315 (24) (a) purchases of a product if:
316 (i) the product is:
317 (A) purchased outside of this state;
318 (B) brought into this state:
319 (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
320 (II) by a nonresident person who is not living or working in this state at the time of the
321 purchase;
322 (C) used for the personal use or enjoyment of the nonresident person described in
323 Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
324 (D) not used in conducting business in this state; and
325 (ii) for:
326 (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
327 the product for a purpose for which the product is designed occurs outside of this state;
328 (B) a boat, the boat is registered outside of this state; or
329 (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
330 outside of this state;
331 (b) the exemption provided for in Subsection (24)(a) does not apply to:
332 (i) a lease or rental of a product; or
333 (ii) a sale of a vehicle exempt under Subsection (33); and
334 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
335 purposes of Subsection (24)(a), the commission may by rule define what constitutes the
336 following:
337 (i) conducting business in this state if that phrase has the same meaning in this
338 Subsection (24) as in Subsection (63);
339 (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
340 as in Subsection (63); or
341 (iii) a purpose for which a product is designed if that phrase has the same meaning in
342 this Subsection (24) as in Subsection (63);
343 (25) a product purchased for resale in this state, in the regular course of business, either
344 in its original form or as an ingredient or component part of a manufactured or compounded
345 product;
346 (26) a product upon which a sales or use tax was paid to some other state, or one of its
347 subdivisions, except that the state shall be paid any difference between the tax paid and the tax
348 imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
349 the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
350 Act;
351 (27) any sale of a service described in Subsections 59-12-103(1)(b), (c), and (d) to a
352 person for use in compounding a service taxable under the subsections;
353 (28) purchases made in accordance with the special supplemental nutrition program for
354 women, infants, and children established in 42 U.S.C. Sec. 1786;
355 (29) sales or leases of rolls, rollers, refractory brick, electric motors, or other
356 replacement parts used in the furnaces, mills, or ovens of a steel mill described in SIC Code
357 3312 of the 1987 Standard Industrial Classification Manual of the federal Executive Office of
358 the President, Office of Management and Budget;
359 (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
360 Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
361 (a) not registered in this state; and
362 (b) (i) not used in this state; or
363 (ii) used in this state:
364 (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
365 time period that does not exceed the longer of:
366 (I) 30 days in any calendar year; or
367 (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
368 the borders of this state; or
369 (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
370 period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
371 state;
372 (31) sales of aircraft manufactured in Utah;
373 (32) amounts paid for the purchase of telecommunications service for purposes of
374 providing telecommunications service;
375 (33) sales, leases, or uses of the following:
376 (a) a vehicle by an authorized carrier; or
377 (b) tangible personal property that is installed on a vehicle:
378 (i) sold or leased to or used by an authorized carrier; and
379 (ii) before the vehicle is placed in service for the first time;
380 (34) (a) 45% of the sales price of any new manufactured home; and
381 (b) 100% of the sales price of any used manufactured home;
382 (35) sales relating to schools and fundraising sales;
383 (36) sales or rentals of durable medical equipment if:
384 (a) a person presents a prescription for the durable medical equipment; and
385 (b) the durable medical equipment is used for home use only;
386 (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
387 Section 72-11-102; and
388 (b) the commission shall by rule determine the method for calculating sales exempt
389 under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
390 (38) sales to a ski resort of:
391 (a) snowmaking equipment;
392 (b) ski slope grooming equipment;
393 (c) passenger ropeways as defined in Section 72-11-102; or
394 (d) parts used in the repairs or renovations of equipment or passenger ropeways
395 described in Subsections (38)(a) through (c);
396 (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
397 (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
398 amusement, entertainment, or recreation an unassisted amusement device as defined in Section
399 59-12-102;
400 (b) if a seller that sells or rents at the same business location the right to use or operate
401 for amusement, entertainment, or recreation one or more unassisted amusement devices and one
402 or more assisted amusement devices, the exemption described in Subsection (40)(a) applies if
403 the seller separately accounts for the sales or rentals of the right to use or operate for
404 amusement, entertainment, or recreation for the assisted amusement devices; and
405 (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
406 Utah Administrative Rulemaking Act, the commission may make rules:
407 (i) governing the circumstances under which sales are at the same business location; and
408 (ii) establishing the procedures and requirements for a seller to separately account for
409 the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
410 assisted amusement devices;
411 (41) (a) sales of photocopies by:
412 (i) a governmental entity; or
413 (ii) an entity within the state system of public education, including:
414 (A) a school; or
415 (B) the State Board of Education; or
416 (b) sales of publications by a governmental entity;
417 (42) amounts paid for admission to an athletic event at an institution of higher
418 education that is subject to the provisions of Title IX of the Education Amendments of 1972, 20
419 U.S.C. Sec. 1681 et seq.;
420 (43) (a) sales made to or by:
421 (i) an area agency on aging; or
422 (ii) a senior citizen center owned by a county, city, or town; or
423 (b) sales made by a senior citizen center that contracts with an area agency on aging;
424 (44) sales or leases of semiconductor fabricating, processing, research, or development
425 materials regardless of whether the semiconductor fabricating, processing, research, or
426 development materials:
427 (a) actually come into contact with a semiconductor; or
428 (b) ultimately become incorporated into real property;
429 (45) an amount paid by or charged to a purchaser for accommodations and services
430 described in Subsection 59-12-103(1)(i) to the extent the amount is exempt under Section
431 59-12-104.2;
432 (46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
433 sports event registration certificate in accordance with Section 41-3-306 for the event period
434 specified on the temporary sports event registration certificate;
435 (47) (a) sales or uses of electricity, if the sales or uses are made under a retail tariff
436 adopted by the Public Service Commission only for purchase of electricity produced from a new
437 alternative energy source built after January 1, 2016, as designated in the tariff by the Public
438 Service Commission;
439 (b) for a residential use customer only, the exemption under Subsection (47)(a) applies
440 only to the portion of the tariff rate a customer pays under the tariff described in Subsection
441 (47)(a) that exceeds the tariff rate under the tariff described in Subsection (47)(a) that the
442 customer would have paid absent the tariff;
443 (48) sales or rentals of mobility enhancing equipment if a person presents a prescription
444 for the mobility enhancing equipment;
445 (49) sales of water in a:
446 (a) pipe;
447 (b) conduit;
448 (c) ditch; or
449 (d) reservoir;
450 (50) sales of currency or coins that constitute legal tender of a state, the United States,
451 or a foreign nation;
452 (51) (a) sales of an item described in Subsection (51)(b) if the item:
453 (i) does not constitute legal tender of a state, the United States, or a foreign nation; and
454 (ii) has a gold, silver, or platinum content of 50% or more; and
455 (b) Subsection (51)(a) applies to a gold, silver, or platinum:
456 (i) ingot;
457 (ii) bar;
458 (iii) medallion; or
459 (iv) decorative coin;
460 (52) amounts paid on a sale-leaseback transaction;
461 (53) sales of a prosthetic device:
462 (a) for use on or in a human; and
463 (b) (i) for which a prescription is required; or
464 (ii) if the prosthetic device is purchased by a hospital or other medical facility;
465 (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
466 machinery or equipment by an establishment described in Subsection (54)(c) if the machinery or
467 equipment is primarily used in the production or postproduction of the following media for
468 commercial distribution:
469 (i) a motion picture;
470 (ii) a television program;
471 (iii) a movie made for television;
472 (iv) a music video;
473 (v) a commercial;
474 (vi) a documentary; or
475 (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
476 commission by administrative rule made in accordance with Subsection (54)(d); or
477 (b) purchases, leases, or rentals of machinery or equipment by an establishment
478 described in Subsection (54)(c) that is used for the production or postproduction of the
479 following are subject to the taxes imposed by this chapter:
480 (i) a live musical performance;
481 (ii) a live news program; or
482 (iii) a live sporting event;
483 (c) the following establishments listed in the 1997 North American Industry
484 Classification System of the federal Executive Office of the President, Office of Management
485 and Budget, apply to Subsections (54)(a) and (b):
486 (i) NAICS Code 512110; or
487 (ii) NAICS Code 51219; and
488 (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
489 commission may by rule:
490 (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
491 or
492 (ii) define:
493 (A) "commercial distribution";
494 (B) "live musical performance";
495 (C) "live news program"; or
496 (D) "live sporting event";
497 (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
498 on or before June 30, 2027, of tangible personal property that:
499 (i) is leased or purchased for or by a facility that:
500 (A) is an alternative energy electricity production facility;
501 (B) is located in the state; and
502 (C) (I) becomes operational on or after July 1, 2004; or
503 (II) has its generation capacity increased by one or more megawatts on or after July 1,
504 2004, as a result of the use of the tangible personal property;
505 (ii) has an economic life of five or more years; and
506 (iii) is used to make the facility or the increase in capacity of the facility described in
507 Subsection (55)(a)(i) operational up to the point of interconnection with an existing
508 transmission grid including:
509 (A) a wind turbine;
510 (B) generating equipment;
511 (C) a control and monitoring system;
512 (D) a power line;
513 (E) substation equipment;
514 (F) lighting;
515 (G) fencing;
516 (H) pipes; or
517 (I) other equipment used for locating a power line or pole; and
518 (b) this Subsection (55) does not apply to:
519 (i) tangible personal property used in construction of:
520 (A) a new alternative energy electricity production facility; or
521 (B) the increase in the capacity of an alternative energy electricity production facility;
522 (ii) contracted services required for construction and routine maintenance activities; and
523 (iii) unless the tangible personal property is used or acquired for an increase in capacity
524 of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal property used or
525 acquired after:
526 (A) the alternative energy electricity production facility described in Subsection
527 (55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
528 (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
529 in Subsection (55)(a)(iii);
530 (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
531 on or before June 30, 2027, of tangible personal property that:
532 (i) is leased or purchased for or by a facility that:
533 (A) is a waste energy production facility;
534 (B) is located in the state; and
535 (C) (I) becomes operational on or after July 1, 2004; or
536 (II) has its generation capacity increased by one or more megawatts on or after July 1,
537 2004, as a result of the use of the tangible personal property;
538 (ii) has an economic life of five or more years; and
539 (iii) is used to make the facility or the increase in capacity of the facility described in
540 Subsection (56)(a)(i) operational up to the point of interconnection with an existing
541 transmission grid including:
542 (A) generating equipment;
543 (B) a control and monitoring system;
544 (C) a power line;
545 (D) substation equipment;
546 (E) lighting;
547 (F) fencing;
548 (G) pipes; or
549 (H) other equipment used for locating a power line or pole; and
550 (b) this Subsection (56) does not apply to:
551 (i) tangible personal property used in construction of:
552 (A) a new waste energy facility; or
553 (B) the increase in the capacity of a waste energy facility;
554 (ii) contracted services required for construction and routine maintenance activities; and
555 (iii) unless the tangible personal property is used or acquired for an increase in capacity
556 described in Subsection (56)(a)(i)(C)(II), tangible personal property used or acquired after:
557 (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
558 described in Subsection (56)(a)(iii); or
559 (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
560 in Subsection (56)(a)(iii);
561 (57) (a) leases of five or more years or purchases made on or after July 1, 2004, but on
562 or before June 30, 2027, of tangible personal property that:
563 (i) is leased or purchased for or by a facility that:
564 (A) is located in the state;
565 (B) produces fuel from alternative energy, including:
566 (I) methanol; or
567 (II) ethanol; and
568 (C) (I) becomes operational on or after July 1, 2004; or
569 (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004,
570 as a result of the installation of the tangible personal property;
571 (ii) has an economic life of five or more years; and
572 (iii) is installed on the facility described in Subsection (57)(a)(i);
573 (b) this Subsection (57) does not apply to:
574 (i) tangible personal property used in construction of:
575 (A) a new facility described in Subsection (57)(a)(i); or
576 (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
577 (ii) contracted services required for construction and routine maintenance activities; and
578 (iii) unless the tangible personal property is used or acquired for an increase in capacity
579 described in Subsection (57)(a)(i)(C)(II), tangible personal property used or acquired after:
580 (A) the facility described in Subsection (57)(a)(i) is operational; or
581 (B) the increased capacity described in Subsection (57)(a)(i) is operational;
582 (58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
583 product transferred electronically to a person within this state if that tangible personal property
584 or product transferred electronically is subsequently shipped outside the state and incorporated
585 pursuant to contract into and becomes a part of real property located outside of this state;
586 (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
587 state or political entity to which the tangible personal property is shipped imposes a sales, use,
588 gross receipts, or other similar transaction excise tax on the transaction against which the other
589 state or political entity allows a credit for sales and use taxes imposed by this chapter; and
590 (c) notwithstanding the time period of Subsection 59-1-1410(8) for filing for a refund, a
591 person may claim the exemption allowed by this Subsection (58) for a sale by filing for a 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 District
669 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 a
702 fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration lists
703 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 a
707 fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration lists
708 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; and
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;
761 (77) purchases of a short-term lodging consumable by a business that provides
762 accommodations and services described in Subsection 59-12-103(1)(i);
763 (78) amounts paid or charged to access a database:
764 (a) if the primary purpose for accessing the database is to view or retrieve information
765 from the database; and
766 (b) not including amounts paid or charged for a:
767 (i) digital audiowork;
768 (ii) digital audio-visual work; or
769 (iii) digital book;
770 (79) amounts paid or charged for a purchase or lease made by an electronic financial
771 payment service, of:
772 (a) machinery and equipment that:
773 (i) are used in the operation of the electronic financial payment service; and
774 (ii) have an economic life of three or more years; and
775 (b) normal operating repair or replacement parts that:
776 (i) are used in the operation of the electronic financial payment service; and
777 (ii) have an economic life of three or more years;
778 (80) beginning on April 1, 2013, sales of a fuel cell as defined in Section 54-15-102;
779 (81) amounts paid or charged for a purchase or lease of tangible personal property or a
780 product transferred electronically if the tangible personal property or product transferred
781 electronically:
782 (a) is stored, used, or consumed in the state; and
783 (b) is temporarily brought into the state from another state:
784 (i) during a disaster period as defined in Section 53-2a-1202;
785 (ii) by an out-of-state business as defined in Section 53-2a-1202;
786 (iii) for a declared state disaster or emergency as defined in Section 53-2a-1202; and
787 (iv) for disaster- or emergency-related work as defined in Section 53-2a-1202;
788 (82) sales of goods and services at a morale, welfare, and recreation facility, as defined
789 in Section 39-9-102, made pursuant to Title 39, Chapter 9, State Morale, Welfare, and
790 Recreation Program;
791 (83) amounts paid or charged for a purchase or lease of molten magnesium;
792 (84) (a) except as provided in Subsection (84)(b), amounts paid or charged for a
793 purchase or lease made by a drilling equipment manufacturer of machinery, equipment,
794 materials, or normal operating repair or replacement parts:
795 (i) that are used or consumed exclusively in the drilling equipment manufacturer's
796 manufacturing process; and
797 (ii) except for office:
798 (A) equipment; or
799 (B) supplies; and
800 (b) beginning on July 1, 2015, and ending on June 30, 2017, a person may claim an
801 exemption described in Subsection (84)(a) only by filing for a refund:
802 (i) of 50% of the tax paid on the amounts paid or charged; and
803 (ii) in accordance with Section 59-1-1410; [
804 (85) amounts paid or charged for a purchase or lease made by a qualifying enterprise
805 data center of machinery, equipment, or normal operating repair or replacement parts, if the
806 machinery, equipment, or normal operating repair or replacement parts:
807 (a) are used in the operation of the establishment; and
808 (b) have an economic life of one or more years[
809 (86) amounts paid or charged for a purchase or lease of machinery, equipment, normal
810 operating repair or replacement parts, catalysts, chemicals, reagents, solutions, or supplies used
811 or consumed:
812 (a) by a refiner who owns, leases, operates, controls, or supervises a refinery as defined
813 in Section 63M-4-701 located in the state;
814 (b) if the machinery, equipment, normal operating repair or replacement parts, catalysts,
815 chemicals, reagents, solutions, or supplies are used or consumed in:
816 (i) the production process to produce gasoline or diesel fuel, or at which blendstock is
817 added to gasoline or diesel fuel;
818 (ii) research and development;
819 (iii) transporting, storing, or managing raw materials, work in process, finished
820 products, and waste materials produced from refining gasoline or diesel fuel, or adding
821 blendstock to gasoline or diesel fuel;
822 (iv) developing or maintaining a road, tunnel, excavation, or similar feature used in
823 refining; or
824 (v) preventing, controlling, or reducing pollutants from refining; and
825 (c) beginning on July 1, 2021, if the person has obtained a form certified by the Office
826 of Energy Development under Subsection 63M-4-702(2).
827 Section 2. Section 63M-4-701 is enacted to read:
828
829 63M-4-701. Definitions.
830 As used in this part:
831 (1) "Blending stock," "blendstock," or "component" means any liquid compound that is
832 blended with other liquid compounds to produce gasoline.
833 (2) "Refiner" means any person who owns, leases, operates, controls, or supervises a
834 refinery.
835 (3) "Refinery" means a facility where gasoline or diesel fuel is produced, including a
836 facility at which blendstocks are combined to produce gasoline or diesel fuel, or at which
837 blendstock is added to gasoline or diesel fuel.
838 Section 3. Section 63M-4-702 is enacted to read:
839 63M-4-702. Refiner gasoline standard reporting -- Office of Energy Development
840 certification of sales and use tax exemption eligibility.
841 (1) (a) Beginning on July 1, 2021, a refiner that seeks to be eligible for a sales and use
842 tax exemption under Subsection 59-12-104(86) shall annually report to the office whether the
843 refiner's facility that is located within the state will have an average gasoline sulfur level of 10
844 parts per million (ppm) or less using the formulas prescribed in 40 C.F.R. Sec. 80.1603,
845 excluding the offset for credit use and transfer as prescribed in 40 C.F.R. Sec. 80.1616.
846 (b) Fuels for which a final destination outside Utah can be demonstrated or that are not
847 subject to the standards and requirements of 40 C.F.R. Sec. 80.1603 as specified in 40 C.F.R.
848 Sec. 80.1601 are not subject to the reporting provisions under Subsection (1)(a).
849 (2) (a) Beginning on July 1, 2021, the office shall annually certify that the refiner is
850 eligible for the sales and use tax exemption under Subsection 59-12-104(86):
851 (i) on a form provided by the State Tax Commission that shall be retained by the refiner
852 claiming the sales and use tax exemption under Subsection 59-12-104(86);
853 (ii) if the refiner's refinery that is located within the state had an average sulfur level of
854 10 parts per million (ppm) or less as reported under Subsection (1) in the previous calendar
855 year; and
856 (iii) before a taxpayer is allowed the sales and use tax exemption under Subsection
857 59-12-104(86).
858 (b) The certification provided by the office under Subsection (2)(a) shall be renewed
859 annually.
860 (c) The office:
861 (i) shall accept a copy of a report submitted by a refiner to the Environmental
862 Protection Agency under 40 C.F.R. Sec. 80.1652 as sufficient evidence of the refiner's average
863 gasoline sulfur level; or
864 (ii) may establish another reporting mechanism through rules made under Subsection
865 (3).
866 (3) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
867 office may make rules to implement this section.
868 Section 4. Effective date.
869 This bill takes effect on January 1, 2018.
870