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7 LONG TITLE
8 Committee Note:
9 The Public Utilities, Energy, and Technology Interim Committee recommended this
10 bill.
11 Legislative Vote: 12 voting for 4 voting against 0 absent
12 General Description:
13 This bill enacts sales and use tax exemptions.
14 Highlighted Provisions:
15 This bill:
16 ▸ enacts a sales and use tax exemption for the purchase or lease of machinery,
17 equipment, normal operating repair or replacement parts, or materials, except for
18 office equipment or office supplies, by an oil and gas extraction establishment or a
19 pipeline transportation establishment;
20 ▸ expands the sales and use tax exemption for the state, its institutions, and its
21 political subdivisions to include certain purchases by an electric generation and
22 transmission facility;
23 ▸ enacts a sales and use tax exemption for amounts paid or charged for construction,
24 operation, maintenance, repair, or replacement of facilities owned by an electrical
25 corporation;
26 ▸ creates a refund process to phase in the exemptions for an electric generation and
27 transmission facility, an electrical corporation, and an oil and gas extraction or
28 pipeline transportation establishment; and
29 ▸ makes technical changes.
30 Money Appropriated in this Bill:
31 None
32 Other Special Clauses:
33 This bill provides a special effective date.
34 Utah Code Sections Affected:
35 AMENDS:
36 59-12-104, as last amended by Laws of Utah 2019, Chapters 136 and 486
37 ENACTS:
38 59-12-104.8, Utah Code Annotated 1953
39 59-12-104.11, Utah Code Annotated 1953
40
41 Be it enacted by the Legislature of the state of Utah:
42 Section 1. Section 59-12-104 is amended to read:
43 59-12-104. Exemptions.
44 Exemptions from the taxes imposed by this chapter are as follows:
45 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
46 under Chapter 13, Motor and Special Fuel Tax Act;
47 (2) (a) subject to Section 59-12-104.6, sales to the state, its institutions, and its political
48 subdivisions[
49 materials unless the construction materials are:
50 [
51 [
52 (i) (A) purchased by or on behalf of institutions of the public education system as
53 defined in Utah Constitution, Article X, Section 2[
54 and
55 (B) clearly identified and segregated and installed or converted to real property which
56 is owned by institutions of the public education system; [
57 (ii) (A) [
58 subdivisions [
59 (B) installed or converted to real property by employees of the state, its institutions, or
60 its political subdivisions; [
61 (b) [
62 the state, its institutions, and its political subdivisions in connection with the construction,
63 operation, maintenance, repair, or replacement of a project, as defined in Section 11-13-103, or
64 facilities providing additional project capacity, as defined in Section 11-13-103;
65 (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
66 (i) the proceeds of each sale do not exceed $1; and
67 (ii) the seller or operator of the vending machine reports an amount equal to 150% of
68 the cost of the item described in Subsection (3)(b) as goods consumed; and
69 (b) Subsection (3)(a) applies to:
70 (i) food and food ingredients; or
71 (ii) prepared food;
72 (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
73 (i) alcoholic beverages;
74 (ii) food and food ingredients; or
75 (iii) prepared food;
76 (b) sales of tangible personal property or a product transferred electronically:
77 (i) to a passenger;
78 (ii) by a commercial airline carrier; and
79 (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
80 (c) services related to Subsection (4)(a) or (b);
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106 (5) sales of parts and equipment for installation in an aircraft operated by a common
107 carrier in interstate or foreign commerce;
108 (6) sales of commercials, motion picture films, prerecorded audio program tapes or
109 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
110 exhibitor, distributor, or commercial television or radio broadcaster;
111 (7) (a) except as provided in Subsection (85) and subject to Subsection (7)(b), sales of
112 cleaning or washing of tangible personal property if the cleaning or washing of the tangible
113 personal property is not assisted cleaning or washing of tangible personal property;
114 (b) if a seller that sells at the same business location assisted cleaning or washing of
115 tangible personal property and cleaning or washing of tangible personal property that is not
116 assisted cleaning or washing of tangible personal property, the exemption described in
117 Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
118 or washing of the tangible personal property; and
119 (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
120 Utah Administrative Rulemaking Act, the commission may make rules:
121 (i) governing the circumstances under which sales are at the same business location;
122 and
123 (ii) establishing the procedures and requirements for a seller to separately account for
124 sales of assisted cleaning or washing of tangible personal property;
125 (8) sales made to or by religious or charitable institutions in the conduct of their regular
126 religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
127 fulfilled;
128 (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
129 this state if the vehicle is:
130 (a) not registered in this state; and
131 (b) (i) not used in this state; or
132 (ii) used in this state:
133 (A) if the vehicle is not used to conduct business, for a time period that does not
134 exceed the longer of:
135 (I) 30 days in any calendar year; or
136 (II) the time period necessary to transport the vehicle to the borders of this state; or
137 (B) if the vehicle is used to conduct business, for the time period necessary to transport
138 the vehicle to the borders of this state;
139 (10) (a) amounts paid for an item described in Subsection (10)(b) if:
140 (i) the item is intended for human use; and
141 (ii) (A) a prescription was issued for the item; or
142 (B) the item was purchased by a hospital or other medical facility; and
143 (b) (i) Subsection (10)(a) applies to:
144 (A) a drug;
145 (B) a syringe; or
146 (C) a stoma supply; and
147 (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
148 commission may by rule define the terms:
149 (A) "syringe"; or
150 (B) "stoma supply";
151 (11) purchases or leases exempt under Section 19-12-201;
152 (12) (a) sales of an item described in Subsection (12)(c) served by:
153 (i) the following if the item described in Subsection (12)(c) is not available to the
154 general public:
155 (A) a church; or
156 (B) a charitable institution; or
157 (ii) an institution of higher education if:
158 (A) the item described in Subsection (12)(c) is not available to the general public; or
159 (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
160 offered by the institution of higher education; or
161 (b) sales of an item described in Subsection (12)(c) provided for a patient by:
162 (i) a medical facility; or
163 (ii) a nursing facility; and
164 (c) Subsections (12)(a) and (b) apply to:
165 (i) food and food ingredients;
166 (ii) prepared food; or
167 (iii) alcoholic beverages;
168 (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
169 or a product transferred electronically by a person:
170 (i) regardless of the number of transactions involving the sale of that tangible personal
171 property or product transferred electronically by that person; and
172 (ii) not regularly engaged in the business of selling that type of tangible personal
173 property or product transferred electronically;
174 (b) this Subsection (13) does not apply if:
175 (i) the sale is one of a series of sales of a character to indicate that the person is
176 regularly engaged in the business of selling that type of tangible personal property or product
177 transferred electronically;
178 (ii) the person holds that person out as regularly engaged in the business of selling that
179 type of tangible personal property or product transferred electronically;
180 (iii) the person sells an item of tangible personal property or product transferred
181 electronically that the person purchased as a sale that is exempt under Subsection (25); or
182 (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
183 this state in which case the tax is based upon:
184 (A) the bill of sale or other written evidence of value of the vehicle or vessel being
185 sold; or
186 (B) in the absence of a bill of sale or other written evidence of value, the fair market
187 value of the vehicle or vessel being sold at the time of the sale as determined by the
188 commission; and
189 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
190 commission shall make rules establishing the circumstances under which:
191 (i) a person is regularly engaged in the business of selling a type of tangible personal
192 property or product transferred electronically;
193 (ii) a sale of tangible personal property or a product transferred electronically is one of
194 a series of sales of a character to indicate that a person is regularly engaged in the business of
195 selling that type of tangible personal property or product transferred electronically; or
196 (iii) a person holds that person out as regularly engaged in the business of selling a type
197 of tangible personal property or product transferred electronically;
198 (14) amounts paid or charged for a purchase or lease of machinery, equipment, normal
199 operating repair or replacement parts, or materials, except for office equipment or office
200 supplies, by:
201 (a) a manufacturing facility that:
202 (i) is located in the state; and
203 (ii) uses or consumes the machinery, equipment, normal operating repair or
204 replacement parts, or materials:
205 (A) in the manufacturing process to manufacture an item sold as tangible personal
206 property, as the commission may define that phrase in accordance with Title 63G, Chapter 3,
207 Utah Administrative Rulemaking Act; or
208 (B) for a scrap recycler, to process an item sold as tangible personal property, as the
209 commission may define that phrase in accordance with Title 63G, Chapter 3, Utah
210 Administrative Rulemaking Act;
211 (b) an establishment, as the commission defines that term in accordance with Title
212 63G, Chapter 3, Utah Administrative Rulemaking Act, that:
213 (i) is described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS
214 Code 213113, Support Activities for Coal Mining, 213114, Support Activities for Metal
215 Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining, of the
216 2002 North American Industry Classification System of the federal Executive Office of the
217 President, Office of Management and Budget;
218 (ii) is located in the state; and
219 (iii) uses or consumes the machinery, equipment, normal operating repair or
220 replacement parts, or materials in:
221 (A) the production process to produce an item sold as tangible personal property, as the
222 commission may define that phrase in accordance with Title 63G, Chapter 3, Utah
223 Administrative Rulemaking Act;
224 (B) research and development, as the commission may define that phrase in accordance
225 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
226 (C) transporting, storing, or managing tailings, overburden, or similar waste materials
227 produced from mining;
228 (D) developing or maintaining a road, tunnel, excavation, or similar feature used in
229 mining; or
230 (E) preventing, controlling, or reducing dust or other pollutants from mining; [
231 (c) an establishment, as the commission defines that term in accordance with Title 63G,
232 Chapter 3, Utah Administrative Rulemaking Act, that:
233 (i) is described in NAICS Code 518112, Web Search Portals, of the 2002 North
234 American Industry Classification System of the federal Executive Office of the President,
235 Office of Management and Budget;
236 (ii) is located in the state; and
237 (iii) uses or consumes the machinery, equipment, normal operating repair or
238 replacement parts, or materials in the operation of the web search portal; or
239 (d) an establishment that meets the requirements of Section 59-12-104.8 to the extent
240 the exemption is authorized by Section 59-12-104.8;
241 (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
242 (i) tooling;
243 (ii) special tooling;
244 (iii) support equipment;
245 (iv) special test equipment; or
246 (v) parts used in the repairs or renovations of tooling or equipment described in
247 Subsections (15)(a)(i) through (iv); and
248 (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
249 (i) the tooling, equipment, or parts are used or consumed exclusively in the
250 performance of any aerospace or electronics industry contract with the United States
251 government or any subcontract under that contract; and
252 (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
253 title to the tooling, equipment, or parts is vested in the United States government as evidenced
254 by:
255 (A) a government identification tag placed on the tooling, equipment, or parts; or
256 (B) listing on a government-approved property record if placing a government
257 identification tag on the tooling, equipment, or parts is impractical;
258 (16) sales of newspapers or newspaper subscriptions;
259 (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
260 product transferred electronically traded in as full or part payment of the purchase price, except
261 that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
262 trade-ins are limited to other vehicles only, and the tax is based upon:
263 (i) the bill of sale or other written evidence of value of the vehicle being sold and the
264 vehicle being traded in; or
265 (ii) in the absence of a bill of sale or other written evidence of value, the then existing
266 fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
267 commission; and
268 (b) Subsection (17)(a) does not apply to the following items of tangible personal
269 property or products transferred electronically traded in as full or part payment of the purchase
270 price:
271 (i) money;
272 (ii) electricity;
273 (iii) water;
274 (iv) gas; or
275 (v) steam;
276 (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
277 or a product transferred electronically used or consumed primarily and directly in farming
278 operations, regardless of whether the tangible personal property or product transferred
279 electronically:
280 (A) becomes part of real estate; or
281 (B) is installed by a:
282 (I) farmer;
283 (II) contractor; or
284 (III) subcontractor; or
285 (ii) sales of parts used in the repairs or renovations of tangible personal property or a
286 product transferred electronically if the tangible personal property or product transferred
287 electronically is exempt under Subsection (18)(a)(i); and
288 (b) amounts paid or charged for the following are subject to the taxes imposed by this
289 chapter:
290 (i) (A) subject to Subsection (18)(b)(i)(B), machinery, equipment, materials, or
291 supplies if used in a manner that is incidental to farming; and
292 (B) tangible personal property that is considered to be used in a manner that is
293 incidental to farming includes:
294 (I) hand tools; or
295 (II) maintenance and janitorial equipment and supplies;
296 (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
297 transferred electronically if the tangible personal property or product transferred electronically
298 is used in an activity other than farming; and
299 (B) tangible personal property or a product transferred electronically that is considered
300 to be used in an activity other than farming includes:
301 (I) office equipment and supplies; or
302 (II) equipment and supplies used in:
303 (Aa) the sale or distribution of farm products;
304 (Bb) research; or
305 (Cc) transportation; or
306 (iii) a vehicle required to be registered by the laws of this state during the period
307 ending two years after the date of the vehicle's purchase;
308 (19) sales of hay;
309 (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
310 garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
311 garden, farm, or other agricultural produce is sold by:
312 (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
313 agricultural produce;
314 (b) an employee of the producer described in Subsection (20)(a); or
315 (c) a member of the immediate family of the producer described in Subsection (20)(a);
316 (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
317 under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
318 (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
319 nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
320 wholesaler, or retailer for use in packaging tangible personal property to be sold by that
321 manufacturer, processor, wholesaler, or retailer;
322 (23) a product stored in the state for resale;
323 (24) (a) purchases of a product if:
324 (i) the product is:
325 (A) purchased outside of this state;
326 (B) brought into this state:
327 (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
328 (II) by a nonresident person who is not living or working in this state at the time of the
329 purchase;
330 (C) used for the personal use or enjoyment of the nonresident person described in
331 Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
332 (D) not used in conducting business in this state; and
333 (ii) for:
334 (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
335 the product for a purpose for which the product is designed occurs outside of this state;
336 (B) a boat, the boat is registered outside of this state; or
337 (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
338 outside of this state;
339 (b) the exemption provided for in Subsection (24)(a) does not apply to:
340 (i) a lease or rental of a product; or
341 (ii) a sale of a vehicle exempt under Subsection (33); and
342 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
343 purposes of Subsection (24)(a), the commission may by rule define what constitutes the
344 following:
345 (i) conducting business in this state if that phrase has the same meaning in this
346 Subsection (24) as in Subsection (63);
347 (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
348 as in Subsection (63); or
349 (iii) a purpose for which a product is designed if that phrase has the same meaning in
350 this Subsection (24) as in Subsection (63);
351 (25) a product purchased for resale in the regular course of business, either in its
352 original form or as an ingredient or component part of a manufactured or compounded product;
353 (26) a product upon which a sales or use tax was paid to some other state, or one of its
354 subdivisions, except that the state shall be paid any difference between the tax paid and the tax
355 imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
356 the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
357 Act;
358 (27) any sale of a service described in Subsections 59-12-103(1)(b), (c), and (d) to a
359 person for use in compounding a service taxable under the subsections;
360 (28) purchases made in accordance with the special supplemental nutrition program for
361 women, infants, and children established in 42 U.S.C. Sec. 1786;
362 (29) sales or leases of rolls, rollers, refractory brick, electric motors, or other
363 replacement parts used in the furnaces, mills, or ovens of a steel mill described in SIC Code
364 3312 of the 1987 Standard Industrial Classification Manual of the federal Executive Office of
365 the President, Office of Management and Budget;
366 (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
367 Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
368 (a) not registered in this state; and
369 (b) (i) not used in this state; or
370 (ii) used in this state:
371 (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
372 time period that does not exceed the longer of:
373 (I) 30 days in any calendar year; or
374 (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
375 the borders of this state; or
376 (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
377 period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
378 state;
379 (31) sales of aircraft manufactured in Utah;
380 (32) amounts paid for the purchase of telecommunications service for purposes of
381 providing telecommunications service;
382 (33) sales, leases, or uses of the following:
383 (a) a vehicle by an authorized carrier; or
384 (b) tangible personal property that is installed on a vehicle:
385 (i) sold or leased to or used by an authorized carrier; and
386 (ii) before the vehicle is placed in service for the first time;
387 (34) (a) 45% of the sales price of any new manufactured home; and
388 (b) 100% of the sales price of any used manufactured home;
389 (35) sales relating to schools and fundraising sales;
390 (36) sales or rentals of durable medical equipment if:
391 (a) a person presents a prescription for the durable medical equipment; and
392 (b) the durable medical equipment is used for home use only;
393 (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
394 Section 72-11-102; and
395 (b) the commission shall by rule determine the method for calculating sales exempt
396 under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
397 (38) sales to a ski resort of:
398 (a) snowmaking equipment;
399 (b) ski slope grooming equipment;
400 (c) passenger ropeways as defined in Section 72-11-102; or
401 (d) parts used in the repairs or renovations of equipment or passenger ropeways
402 described in Subsections (38)(a) through (c);
403 (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
404 (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
405 amusement, entertainment, or recreation an unassisted amusement device as defined in Section
406 59-12-102;
407 (b) if a seller that sells or rents at the same business location the right to use or operate
408 for amusement, entertainment, or recreation one or more unassisted amusement devices and
409 one or more assisted amusement devices, the exemption described in Subsection (40)(a)
410 applies if the seller separately accounts for the sales or rentals of the right to use or operate for
411 amusement, entertainment, or recreation for the assisted amusement devices; and
412 (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
413 Utah Administrative Rulemaking Act, the commission may make rules:
414 (i) governing the circumstances under which sales are at the same business location;
415 and
416 (ii) establishing the procedures and requirements for a seller to separately account for
417 the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
418 assisted amusement devices;
419 (41) (a) sales of photocopies by:
420 (i) a governmental entity; or
421 (ii) an entity within the state system of public education, including:
422 (A) a school; or
423 (B) the State Board of Education; or
424 (b) sales of publications by a governmental entity;
425 (42) amounts paid for admission to an athletic event at an institution of higher
426 education that is subject to the provisions of Title IX of the Education Amendments of 1972,
427 20 U.S.C. Sec. 1681 et seq.;
428 (43) (a) sales made to or by:
429 (i) an area agency on aging; or
430 (ii) a senior citizen center owned by a county, city, or town; or
431 (b) sales made by a senior citizen center that contracts with an area agency on aging;
432 (44) sales or leases of semiconductor fabricating, processing, research, or development
433 materials regardless of whether the semiconductor fabricating, processing, research, or
434 development materials:
435 (a) actually come into contact with a semiconductor; or
436 (b) ultimately become incorporated into real property;
437 (45) an amount paid by or charged to a purchaser for accommodations and services
438 described in Subsection 59-12-103(1)(i) to the extent the amount is exempt under Section
439 59-12-104.2;
440 (46) [
441 sports event registration certificate in accordance with Section 41-3-306 for the event period
442 specified on the temporary sports event registration certificate;
443 (47) (a) sales or uses of electricity, if the sales or uses are made under a retail tariff
444 adopted by the Public Service Commission only for purchase of electricity produced from a
445 new alternative energy source built after January 1, 2016, as designated in the tariff by the
446 Public Service Commission; and
447 (b) for a residential use customer only, the exemption under Subsection (47)(a) applies
448 only to the portion of the tariff rate a customer pays under the tariff described in Subsection
449 (47)(a) that exceeds the tariff rate under the tariff described in Subsection (47)(a) that the
450 customer would have paid absent the tariff;
451 (48) sales or rentals of mobility enhancing equipment if a person presents a
452 prescription for the mobility enhancing equipment;
453 (49) sales of water in a:
454 (a) pipe;
455 (b) conduit;
456 (c) ditch; or
457 (d) reservoir;
458 (50) sales of currency or coins that constitute legal tender of a state, the United States,
459 or a foreign nation;
460 (51) (a) sales of an item described in Subsection (51)(b) if the item:
461 (i) does not constitute legal tender of a state, the United States, or a foreign nation; and
462 (ii) has a gold, silver, or platinum content of 50% or more; and
463 (b) Subsection (51)(a) applies to a gold, silver, or platinum:
464 (i) ingot;
465 (ii) bar;
466 (iii) medallion; or
467 (iv) decorative coin;
468 (52) amounts paid on a sale-leaseback transaction;
469 (53) sales of a prosthetic device:
470 (a) for use on or in a human; and
471 (b) (i) for which a prescription is required; or
472 (ii) if the prosthetic device is purchased by a hospital or other medical facility;
473 (54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
474 machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
475 or equipment is primarily used in the production or postproduction of the following media for
476 commercial distribution:
477 (i) a motion picture;
478 (ii) a television program;
479 (iii) a movie made for television;
480 (iv) a music video;
481 (v) a commercial;
482 (vi) a documentary; or
483 (vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
484 commission by administrative rule made in accordance with Subsection (54)(d); or
485 (b) purchases, leases, or rentals of machinery or equipment by an establishment
486 described in Subsection (54)(c) that is used for the production or postproduction of the
487 following are subject to the taxes imposed by this chapter:
488 (i) a live musical performance;
489 (ii) a live news program; or
490 (iii) a live sporting event;
491 (c) the following establishments listed in the 1997 North American Industry
492 Classification System of the federal Executive Office of the President, Office of Management
493 and Budget, apply to Subsections (54)(a) and (b):
494 (i) NAICS Code 512110; or
495 (ii) NAICS Code 51219; and
496 (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
497 commission may by rule:
498 (i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
499 or
500 (ii) define:
501 (A) "commercial distribution";
502 (B) "live musical performance";
503 (C) "live news program"; or
504 (D) "live sporting event";
505 (55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
506 on or before June 30, 2027, of tangible personal property that:
507 (i) is leased or purchased for or by a facility that:
508 (A) is an alternative energy electricity production facility;
509 (B) is located in the state; and
510 (C) (I) becomes operational on or after July 1, 2004; or
511 (II) has its generation capacity increased by one or more megawatts on or after July 1,
512 2004, as a result of the use of the tangible personal property;
513 (ii) has an economic life of five or more years; and
514 (iii) is used to make the facility or the increase in capacity of the facility described in
515 Subsection (55)(a)(i) operational up to the point of interconnection with an existing
516 transmission grid including:
517 (A) a wind turbine;
518 (B) generating equipment;
519 (C) a control and monitoring system;
520 (D) a power line;
521 (E) substation equipment;
522 (F) lighting;
523 (G) fencing;
524 (H) pipes; or
525 (I) other equipment used for locating a power line or pole; and
526 (b) this Subsection (55) does not apply to:
527 (i) tangible personal property used in construction of:
528 (A) a new alternative energy electricity production facility; or
529 (B) the increase in the capacity of an alternative energy electricity production facility;
530 (ii) contracted services required for construction and routine maintenance activities;
531 and
532 (iii) unless the tangible personal property is used or acquired for an increase in capacity
533 of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal property used or
534 acquired after:
535 (A) the alternative energy electricity production facility described in Subsection
536 (55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
537 (B) the increased capacity described in Subsection (55)(a)(i) is operational as described
538 in Subsection (55)(a)(iii);
539 (56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
540 on or before June 30, 2027, of tangible personal property that:
541 (i) is leased or purchased for or by a facility that:
542 (A) is a waste energy production facility;
543 (B) is located in the state; and
544 (C) (I) becomes operational on or after July 1, 2004; or
545 (II) has its generation capacity increased by one or more megawatts on or after July 1,
546 2004, as a result of the use of the tangible personal property;
547 (ii) has an economic life of five or more years; and
548 (iii) is used to make the facility or the increase in capacity of the facility described in
549 Subsection (56)(a)(i) operational up to the point of interconnection with an existing
550 transmission grid including:
551 (A) generating equipment;
552 (B) a control and monitoring system;
553 (C) a power line;
554 (D) substation equipment;
555 (E) lighting;
556 (F) fencing;
557 (G) pipes; or
558 (H) other equipment used for locating a power line or pole; and
559 (b) this Subsection (56) does not apply to:
560 (i) tangible personal property used in construction of:
561 (A) a new waste energy facility; or
562 (B) the increase in the capacity of a waste energy facility;
563 (ii) contracted services required for construction and routine maintenance activities;
564 and
565 (iii) unless the tangible personal property is used or acquired for an increase in capacity
566 described in Subsection (56)(a)(i)(C)(II), tangible personal property used or acquired after:
567 (A) the waste energy facility described in Subsection (56)(a)(i) is operational as
568 described in Subsection (56)(a)(iii); or
569 (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
570 in Subsection (56)(a)(iii);
571 (57) (a) leases of five or more years or purchases made on or after July 1, 2004, but on
572 or before June 30, 2027, of tangible personal property that:
573 (i) is leased or purchased for or by a facility that:
574 (A) is located in the state;
575 (B) produces fuel from alternative energy, including:
576 (I) methanol; or
577 (II) ethanol; and
578 (C) (I) becomes operational on or after July 1, 2004; or
579 (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
580 a result of the installation of the tangible personal property;
581 (ii) has an economic life of five or more years; and
582 (iii) is installed on the facility described in Subsection (57)(a)(i);
583 (b) this Subsection (57) does not apply to:
584 (i) tangible personal property used in construction of:
585 (A) a new facility described in Subsection (57)(a)(i); or
586 (B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
587 (ii) contracted services required for construction and routine maintenance activities;
588 and
589 (iii) unless the tangible personal property is used or acquired for an increase in capacity
590 described in Subsection (57)(a)(i)(C)(II), tangible personal property used or acquired after:
591 (A) the facility described in Subsection (57)(a)(i) is operational; or
592 (B) the increased capacity described in Subsection (57)(a)(i) is operational;
593 (58) (a) subject to Subsection (58)(b) [
594 product transferred electronically to a person within this state if that tangible personal property
595 or product transferred electronically is subsequently shipped outside the state and incorporated
596 pursuant to contract into and becomes a part of real property located outside of this state; and
597 (b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
598 state or political entity to which the tangible personal property is shipped imposes a sales, use,
599 gross receipts, or other similar transaction excise tax on the transaction against which the other
600 state or political entity allows a credit for sales and use taxes imposed by this chapter; [
601 [
602
603
604 [
605 [
606
607 [
608
609 [
610 [
611 [
612
613 (59) purchases:
614 (a) of one or more of the following items in printed or electronic format:
615 (i) a list containing information that includes one or more[
616
617 (ii) a database containing information that includes one or more[
618
619 (b) used to send direct mail;
620 (60) redemptions or repurchases of a product by a person if that product was:
621 (a) delivered to a pawnbroker as part of a pawn transaction; and
622 (b) redeemed or repurchased within the time period established in a written agreement
623 between the person and the pawnbroker for redeeming or repurchasing the product;
624 (61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
625 (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
626 and
627 (ii) has a useful economic life of one or more years; and
628 (b) the following apply to Subsection (61)(a):
629 (i) telecommunications enabling or facilitating equipment, machinery, or software;
630 (ii) telecommunications equipment, machinery, or software required for 911 service;
631 (iii) telecommunications maintenance or repair equipment, machinery, or software;
632 (iv) telecommunications switching or routing equipment, machinery, or software; or
633 (v) telecommunications transmission equipment, machinery, or software;
634 (62) (a) beginning on July 1, 2006, and ending on June 30, 2027, purchases of tangible
635 personal property or a product transferred electronically that are used in the research and
636 development of alternative energy technology; and
637 (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
638 commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
639 purchases of tangible personal property or a product transferred electronically that are used in
640 the research and development of alternative energy technology;
641 (63) (a) purchases of tangible personal property or a product transferred electronically
642 if:
643 (i) the tangible personal property or product transferred electronically is:
644 (A) purchased outside of this state;
645 (B) brought into this state at any time after the purchase described in Subsection
646 (63)(a)(i)(A); and
647 (C) used in conducting business in this state; and
648 (ii) for:
649 (A) tangible personal property or a product transferred electronically other than the
650 tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
651 for a purpose for which the property is designed occurs outside of this state; or
652 (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
653 outside of this state;
654 (b) the exemption provided for in Subsection (63)(a) does not apply to:
655 (i) a lease or rental of tangible personal property or a product transferred electronically;
656 or
657 (ii) a sale of a vehicle exempt under Subsection (33); and
658 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
659 purposes of Subsection (63)(a), the commission may by rule define what constitutes the
660 following:
661 (i) conducting business in this state if that phrase has the same meaning in this
662 Subsection (63) as in Subsection (24);
663 (ii) the first use of tangible personal property or a product transferred electronically if
664 that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
665 (iii) a purpose for which tangible personal property or a product transferred
666 electronically is designed if that phrase has the same meaning in this Subsection (63) as in
667 Subsection (24);
668 (64) sales of disposable home medical equipment or supplies if:
669 (a) a person presents a prescription for the disposable home medical equipment or
670 supplies;
671 (b) the disposable home medical equipment or supplies are used exclusively by the
672 person to whom the prescription described in Subsection (64)(a) is issued; and
673 (c) the disposable home medical equipment and supplies are listed as eligible for
674 payment under:
675 (i) Title XVIII, federal Social Security Act; or
676 (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
677 (65) sales:
678 (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
679 District Act; or
680 (b) of tangible personal property to a subcontractor of a public transit district, if the
681 tangible personal property is:
682 (i) clearly identified; and
683 (ii) installed or converted to real property owned by the public transit district;
684 (66) sales of construction materials:
685 (a) purchased on or after July 1, 2010;
686 (b) purchased by, on behalf of, or for the benefit of an international airport:
687 (i) located within a county of the first class; and
688 (ii) that has a United States customs office on its premises; and
689 (c) if the construction materials are:
690 (i) clearly identified;
691 (ii) segregated; and
692 (iii) installed or converted to real property:
693 (A) owned or operated by the international airport described in Subsection (66)(b); and
694 (B) located at the international airport described in Subsection (66)(b);
695 (67) sales of construction materials:
696 (a) purchased on or after July 1, 2008;
697 (b) purchased by, on behalf of, or for the benefit of a new airport:
698 (i) located within a county of the second class; and
699 (ii) that is owned or operated by a city in which an airline as defined in Section
700 59-2-102 is headquartered; and
701 (c) if the construction materials are:
702 (i) clearly identified;
703 (ii) segregated; and
704 (iii) installed or converted to real property:
705 (A) owned or operated by the new airport described in Subsection (67)(b);
706 (B) located at the new airport described in Subsection (67)(b); and
707 (C) as part of the construction of the new airport described in Subsection (67)(b);
708 (68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
709 (69) purchases and sales described in Section 63H-4-111;
710 (70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
711 overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
712 a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
713 lists a state or country other than this state as the location of registry of the fixed wing turbine
714 powered aircraft; or
715 (b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
716 provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
717 a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
718 lists a state or country other than this state as the location of registry of the fixed wing turbine
719 powered aircraft;
720 (71) subject to Section 59-12-104.4, sales of a textbook for a higher education course:
721 (a) to a person admitted to an institution of higher education; and
722 (b) by a seller, other than a bookstore owned by an institution of higher education, if
723 51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
724 textbook for a higher education course;
725 (72) a license fee or tax a municipality imposes in accordance with Subsection
726 10-1-203(5) on a purchaser from a business for which the municipality provides an enhanced
727 level of municipal services;
728 (73) amounts paid or charged for construction materials used in the construction of a
729 new or expanding life science research and development facility in the state, if the construction
730 materials are:
731 (a) clearly identified;
732 (b) segregated; and
733 (c) installed or converted to real property;
734 (74) amounts paid or charged for:
735 (a) a purchase or lease of machinery and equipment that:
736 (i) are used in performing qualified research:
737 (A) as defined in Section 41(d), Internal Revenue Code; and
738 (B) in the state; and
739 (ii) have an economic life of three or more years; and
740 (b) normal operating repair or replacement parts:
741 (i) for the machinery and equipment described in Subsection (74)(a); and
742 (ii) that have an economic life of three or more years;
743 (75) a sale or lease of tangible personal property used in the preparation of prepared
744 food if:
745 (a) for a sale:
746 (i) the ownership of the seller and the ownership of the purchaser are identical; and
747 (ii) the seller or the purchaser paid a tax under this chapter on the purchase of that
748 tangible personal property prior to making the sale; or
749 (b) for a lease:
750 (i) the ownership of the lessor and the ownership of the lessee are identical; and
751 (ii) the lessor or the lessee paid a tax under this chapter on the purchase of that tangible
752 personal property prior to making the lease;
753 (76) (a) purchases of machinery or equipment if:
754 (i) the purchaser is an establishment described in NAICS Subsector 713, Amusement,
755 Gambling, and Recreation Industries, of the 2012 North American Industry Classification
756 System of the federal Executive Office of the President, Office of Management and Budget;
757 (ii) the machinery or equipment:
758 (A) has an economic life of three or more years; and
759 (B) is used by one or more persons who pay admission or user fees described in
760 Subsection 59-12-103(1)(f) to the purchaser of the machinery and equipment; and
761 (iii) 51% or more of the purchaser's sales revenue for the previous calendar quarter is:
762 (A) amounts paid or charged as admission or user fees described in Subsection
763 59-12-103(1)(f); and
764 (B) subject to taxation under this chapter; and
765 (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
766 commission may make rules for verifying that 51% of a purchaser's sales revenue for the
767 previous calendar quarter is:
768 (i) amounts paid or charged as admission or user fees described in Subsection
769 59-12-103(1)(f); and
770 (ii) subject to taxation under this chapter;
771 (77) purchases of a short-term lodging consumable by a business that provides
772 accommodations and services described in Subsection 59-12-103(1)(i);
773 (78) amounts paid or charged to access a database:
774 (a) if the primary purpose for accessing the database is to view or retrieve information
775 from the database; and
776 (b) not including amounts paid or charged for a:
777 (i) digital audiowork;
778 (ii) digital audio-visual work; or
779 (iii) digital book;
780 (79) amounts paid or charged for a purchase or lease made by an electronic financial
781 payment service, of:
782 (a) machinery and equipment that:
783 (i) are used in the operation of the electronic financial payment service; and
784 (ii) have an economic life of three or more years; and
785 (b) normal operating repair or replacement parts that:
786 (i) are used in the operation of the electronic financial payment service; and
787 (ii) have an economic life of three or more years;
788 (80) [
789 (81) amounts paid or charged for a purchase or lease of tangible personal property or a
790 product transferred electronically if the tangible personal property or product transferred
791 electronically:
792 (a) is stored, used, or consumed in the state; and
793 (b) is temporarily brought into the state from another state:
794 (i) during a disaster period as defined in Section 53-2a-1202;
795 (ii) by an out-of-state business as defined in Section 53-2a-1202;
796 (iii) for a declared state disaster or emergency as defined in Section 53-2a-1202; and
797 (iv) for disaster- or emergency-related work as defined in Section 53-2a-1202;
798 (82) sales of goods and services at a morale, welfare, and recreation facility, as defined
799 in Section 39-9-102, made pursuant to Title 39, Chapter 9, State Morale, Welfare, and
800 Recreation Program;
801 (83) amounts paid or charged for a purchase or lease of molten magnesium;
802 (84) amounts paid or charged for a purchase or lease made by a qualifying enterprise
803 data center of machinery, equipment, or normal operating repair or replacement parts, if the
804 machinery, equipment, or normal operating repair or replacement parts:
805 (a) are used in the operation of the establishment; and
806 (b) have an economic life of one or more years;
807 (85) sales of cleaning or washing of a vehicle, except for cleaning or washing of a
808 vehicle that includes cleaning or washing of the interior of the vehicle;
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,
815 catalysts, 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 (87) amounts paid to or charged by a proprietor for accommodations and services, as
828 defined in Section 63H-1-205, if the proprietor is subject to the MIDA accommodations tax
829 imposed under Section 63H-1-205;
830 (88) amounts paid or charged for a purchase or lease of machinery, equipment, normal
831 operating repair or replacement parts, or materials, except for office equipment or office
832 supplies, by an establishment, as the commission defines that term in accordance with Title
833 63G, Chapter 3, Utah Administrative Rulemaking Act, that:
834 (a) is described in NAICS Code 621511, Medical Laboratories, of the 2017 North
835 American Industry Classification System of the federal Executive Office of the President,
836 Office of Management and Budget;
837 (b) is located in this state; and
838 (c) uses the machinery, equipment, normal operating repair or replacement parts, or
839 materials in the operation of the establishment; [
840 (89) amounts paid or charged for an item exempt under Section 59-12-104.10[
841 (90) subject to Section 59-12-104.11, amounts paid or charged in connection with the
842 construction, operation, maintenance, repair, or replacement of facilities owned by an electrical
843 corporation as defined in Section 54-2-1.
844 Section 2. Section 59-12-104.8 is enacted to read:
845 59-12-104.8. Exemption for purchases or lease of machinery, equipment, normal
846 operating repair or replacement parts, and materials by oil and gas extraction or pipeline
847 transportation establishment.
848 (1) This section applies to amounts paid or charged for a purchase or lease of
849 machinery, equipment, normal operating repair or replacement parts, or materials, except for
850 office equipment or office supplies, by an establishment, as the commission defines that term
851 in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that:
852 (a) is described in NAICS Subsector 211, Oil and Gas Extraction, NAICS Code
853 213111, Drilling Oil and Gas Wells, NAICS Code 213112, Support Activities for Oil and Gas
854 Operations, NAICS Code 486110, Pipeline Transportation of Crude Oil, NAICS Code 486210,
855 Pipeline Transportation of Natural Gas, or NAICS Code 486910, Pipeline Transportation of
856 Refined Petroleum Products, of the 2017 North American Industry Classification System of the
857 federal Executive Office of the President, Office of Management and Budget;
858 (b) is located in the state; and
859 (c) uses or consumes the machinery, equipment, normal operating repair or
860 replacement parts, or materials in:
861 (i) the production process to produce an item sold as tangible personal property, as the
862 commission may define that phrase in accordance with Title 63G, Chapter 3, Utah
863 Administrative Rulemaking Act;
864 (ii) research and development, as the commission may define that phrase in accordance
865 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
866 (iii) transporting, storing, or managing crude oil, natural gas, or refined petroleum
867 products;
868 (iv) developing or maintaining a road, tunnel, excavation, or similar feature used in oil
869 or gas extraction or pipeline transportation; or
870 (v) preventing, controlling, or reducing dust or other pollutants from oil or gas
871 extraction or pipeline transportation.
872 (2) (a) For a purchase or lease made on or after January 1, 2021, but on or before
873 December 31, 2022, a person may claim the sales and use tax exemption described in this
874 section by filing for a refund from the commission.
875 (b) The amount of the refund described in Subsection (2)(a) is as follows:
876 (i) for a purchase or lease made on or after January 1, 2021, but on or before December
877 31, 2021, 33% of the sales and use tax on the amount paid or charged for the purchase or lease;
878 and
879 (ii) for a purchase or lease made on or after January 1, 2022, but on or before
880 December 31, 2022, 66% of the sales and use tax on the amount paid or charged for the
881 purchase or lease.
882 (c) A person shall file for a refund under this Subsection (2):
883 (i) in an electronic format prescribed by the commission; and
884 (ii) no more frequently than once per month.
885 (3) (a) For a purchase or a lease made on or after January 1, 2023, a person may claim
886 the sales and use tax exemption described in this section at the point of sale.
887 (b) The amount of the exemption described in Subsection (3)(a) is 100% of the sales
888 and use tax on the amount paid or charged for the purchase or lease.
889 Section 3. Section 59-12-104.11 is enacted to read:
890 59-12-104.11. Exemption for purchases by an electric generation and transmission
891 facility or electrical corporation.
892 (1) (a) For a purchase made on or after January 1, 2021, but on or before December 31,
893 2022, a person may claim the sales and use tax exemption described in Subsection
894 59-12-104(2)(b) or (90) by filing for a refund from the commission.
895 (b) The amount of the refund described in Subsection (1)(a) is as follows:
896 (i) for a purchase made on or after January 1, 2021, but on or before December 31,
897 2021, 33% of the sales and use tax on the amount paid or charged for the purchase; and
898 (ii) for a purchase made on or after January 1, 2022, but on or before December 31,
899 2022, 66% of the sales and use tax on the amount paid or charged for the purchase.
900 (c) A person shall file for a refund under this Subsection (1):
901 (i) in an electronic format prescribed by the commission; and
902 (ii) no more frequently than once per month.
903 (2) (a) For a purchase made on or after January 1, 2023, a person may claim the sales
904 and use tax exemption described in Subsection 59-12-104(2)(b) or (90) at the point of sale.
905 (b) The amount of the exemption is 100% of the sales and use tax on the amount paid
906 or charged for the purchase.
907 Section 4. Effective date.
908 This bill takes effect on January 1, 2021.