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7 LONG TITLE
8 General Description:
9 This bill modifies sales and use tax provisions related to refunds.
10 Highlighted Provisions:
11 This bill:
12 ▸ enacts a refund of state sales and use tax paid for the purchase or lease of
13 machinery, equipment, normal operating repair or replacement parts, or materials,
14 except for office equipment or office supplies, by an oil and gas extraction
15 establishment or a pipeline transportation establishment; and
16 ▸ phases in the refund process.
17 Money Appropriated in this Bill:
18 None
19 Other Special Clauses:
20 This bill provides a special effective date.
21 Utah Code Sections Affected:
22 ENACTS:
23 59-12-104.8, Utah Code Annotated 1953
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25 Be it enacted by the Legislature of the state of Utah:
26 Section 1. Section 59-12-104.8 is enacted to read:
27 59-12-104.8. Refund for state sales and use tax on purchases or lease of
28 machinery, equipment, normal operating repair or replacement parts, and materials by
29 an oil and gas extraction establishment.
30 (1) This section applies to amounts paid or charged for a purchase or lease of
31 machinery, equipment, normal operating repair or replacement parts, or materials, except for
32 office equipment or office supplies, by an establishment, as the commission defines that term
33 in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that:
34 (a) is described in NAICS Subsector 211, Oil and Gas Extraction, or NAICS Code
35 213111, Drilling Oil and Gas Wells, NAICS Code 213112, Support Activities for Oil and Gas
36 Operations, NAICS Code 486110, Pipeline Transportation of Crude Oil, or NAICS Code
37 486210, Pipeline Transportation of Natural Gas, of the 2017 North American Industry
38 Classification System of the federal Executive Office of the President, Office of Management
39 and Budget;
40 (b) is located in the state; and
41 (c) uses or consumes the machinery, equipment, normal operating repair or
42 replacement parts, or materials in:
43 (i) the production process to produce an item sold as tangible personal property, as the
44 commission may define that phrase in accordance with Title 63G, Chapter 3, Utah
45 Administrative Rulemaking Act;
46 (ii) research and development, as the commission may define that phrase in accordance
47 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
48 (iii) transporting, storing, or managing crude oil, natural gas, or refined petroleum
49 products;
50 (iv) developing or maintaining a road, tunnel, excavation, or similar feature used in oil
51 or gas extraction; or
52 (v) preventing, controlling, or reducing dust or other pollutants from oil or gas
53 extraction.
54 (2) (a) A person may request a refund from the commission for the sales and use tax
55 paid on a purchase or lease described in Subsection (1).
56 (b) The amount of the refund is as follows:
57 (i) for a purchase or lease made on or after January 1, 2024, but on or before December
58 31, 2024, 33% of sales and use tax paid under Subsection 59-12-103(2)(a)(i)(A);
59 (ii) for a purchase or lease made on or after January 1, 2025, but on or before
60 December 31, 2025, 66% of the sales and use tax paid under Subsection 59-12-103(2)(a)(i)(A);
61 and
62 (iii) for a purchase or lease made on or after January 1, 2026, 100% of the sales and use
63 tax paid under Subsection 59-12-103(2)(a)(i)(A).
64 (c) A person shall file for a refund under this Subsection (2):
65 (i) in an electronic format prescribed by the commission; and
66 (ii) no more frequently than once per quarter.
67 (3) The commission may calculate and retain from each refund issued under this
68 section an amount to cover the commission's actual cost of administering the refund.
69 Section 2. Effective date.
70 This bill takes effect January 1, 2024.