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H.B. 109
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SALES AND USE TAX - FOOD AND FOOD
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INGREDIENTS AND TAX RATES
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2006 GENERAL SESSION
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STATE OF UTAH
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Chief Sponsor: Merlynn T. Newbold
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Senate Sponsor:
Michael G. Waddoups
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LONG TITLE
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General Description:
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This bill amends the Sales and Use Tax Act to address sales and use taxes relating to
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food and food ingredients and tax rates.
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Highlighted Provisions:
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This bill:
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. provides a sales and use tax exemption for food and food ingredients;
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. increases certain local option sales and use tax rates; and
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. makes technical changes.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill takes effect on July 1, 2006.
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Utah Code Sections Affected:
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AMENDS:
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59-12-104, as last amended by Chapters 158, 203, 209, 240 and 246, Laws of Utah
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2005
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59-12-204 (Effective 07/01/06), as last amended by Chapters 312 and 337, Laws of
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Utah 2003
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59-12-1102 (See 59-1-1201 re: Eff), as last amended by Chapter 255, Laws of Utah
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2004
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
59-12-104
is amended to read:
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59-12-104. Exemptions.
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The following sales and uses are exempt from the taxes imposed by this chapter:
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(1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
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under Chapter 13, Motor and Special Fuel Tax Act;
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(2) sales to the state, its institutions, and its political subdivisions; however, this
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exemption does not apply to sales of:
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(a) construction materials except:
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(i) construction materials purchased by or on behalf of institutions of the public
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education system as defined in Utah Constitution Article X, Section 2, provided the
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construction materials are clearly identified and segregated and installed or converted to real
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property which is owned by institutions of the public education system; and
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(ii) construction materials purchased by the state, its institutions, or its political
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subdivisions which are installed or converted to real property by employees of the state, its
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institutions, or its political subdivisions; or
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(b) tangible personal property in connection with the construction, operation,
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maintenance, repair, or replacement of a project, as defined in Section
11-13-103
, or facilities
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providing additional project capacity, as defined in Section
11-13-103
;
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(3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
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(i) the proceeds of each sale do not exceed $1; and
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(ii) the seller or operator of the vending machine reports an amount equal to 150% of
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the cost of the item described in Subsection (3)(b) as goods consumed; and
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(b) Subsection (3)(a) applies to:
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(i) food and food ingredients; or
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(ii) prepared food;
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(4) sales of the following to a commercial airline carrier for in-flight consumption:
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(a) food and food ingredients;
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(b) prepared food; or
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(c) services related to Subsection (4)(a) or (b);
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(5) sales of parts and equipment for installation in aircraft operated by common carriers
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in interstate or foreign commerce;
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(6) sales of commercials, motion picture films, prerecorded audio program tapes or
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records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
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exhibitor, distributor, or commercial television or radio broadcaster;
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(7) sales of cleaning or washing of tangible personal property by a coin-operated
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laundry or dry cleaning machine;
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(8) sales made to or by religious or charitable institutions in the conduct of their regular
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religious or charitable functions and activities, if the requirements of Section
59-12-104.1
are
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fulfilled;
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(9) sales of vehicles of a type required to be registered under the motor vehicle laws of
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this state which are made to bona fide nonresidents of this state and are not afterwards
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registered or used in this state except as necessary to transport them to the borders of this state;
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(10) (a) amounts paid for an item described in Subsection (10)(b) if:
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(i) the item is intended for human use; and
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(ii) (A) a prescription was issued for the item; or
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(B) the item was purchased by a hospital or other medical facility; and
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(b) (i) Subsection (10)(a) applies to:
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(A) a drug;
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(B) a syringe; or
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(C) a stoma supply; and
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(ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
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commission may by rule define the terms:
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(A) "syringe"; or
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(B) "stoma supply";
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(11) sales or use of property, materials, or services used in the construction of or
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incorporated in pollution control facilities allowed by Sections
19-2-123
through
19-2-127
;
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(12) (a) sales of an item described in Subsection (12)(c) served by:
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(i) the following if the item described in Subsection (12)(c) is not available to the
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general public:
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(A) a church; or
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(B) a charitable institution;
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(ii) an institution of higher education if:
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(A) the item described in Subsection (12)(c) is not available to the general public; or
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(B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
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offered by the institution of higher education; or
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(b) sales of an item described in Subsection (12)(c) provided for a patient by:
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(i) a medical facility; or
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(ii) a nursing facility; and
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(c) Subsections (12)(a) and (b) apply to:
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(i) food and food ingredients;
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(ii) prepared food; or
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(iii) alcoholic beverages;
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(13) isolated or occasional sales by persons not regularly engaged in business, except
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the sale of vehicles or vessels required to be titled or registered under the laws of this state in
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which case the tax is based upon:
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(a) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
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or
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(b) in the absence of a bill of sale or other written evidence of value, the then existing
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fair market value of the vehicle or vessel being sold as determined by the commission;
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(14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
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(i) machinery and equipment:
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(A) used in the manufacturing process;
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(B) having an economic life of three or more years; and
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(C) used:
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(I) to manufacture an item sold as tangible personal property; and
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(II) in new or expanding operations in a manufacturing facility in the state; and
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(ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
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(A) have an economic life of three or more years;
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(B) are used in the manufacturing process in a manufacturing facility in the state;
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(C) are used to replace or adapt an existing machine to extend the normal estimated
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useful life of the machine; and
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(D) do not include repairs and maintenance;
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(b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
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(i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in
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Subsection (14)(a)(ii) is exempt;
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(ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described
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in Subsection (14)(a)(ii) is exempt; and
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(iii) beginning July 1, 1998, 100% of the sale or lease described in Subsection
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(14)(a)(ii) is exempt;
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(c) for purposes of this Subsection (14), the commission shall by rule define the terms
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"new or expanding operations" and "establishment"; and
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(d) on or before October 1, 1991, and every five years after October 1, 1991, the
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commission shall:
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(i) review the exemptions described in Subsection (14)(a) and make recommendations
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to the Revenue and Taxation Interim Committee concerning whether the exemptions should be
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continued, modified, or repealed; and
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(ii) include in its report:
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(A) the cost of the exemptions;
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(B) the purpose and effectiveness of the exemptions; and
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(C) the benefits of the exemptions to the state;
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(15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
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(i) tooling;
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(ii) special tooling;
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(iii) support equipment;
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(iv) special test equipment; or
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(v) parts used in the repairs or renovations of tooling or equipment described in
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Subsections (15)(a)(i) through (iv); and
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(b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
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(i) the tooling, equipment, or parts are used or consumed exclusively in the
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performance of any aerospace or electronics industry contract with the United States
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government or any subcontract under that contract; and
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(ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
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title to the tooling, equipment, or parts is vested in the United States government as evidenced
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by:
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(A) a government identification tag placed on the tooling, equipment, or parts; or
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(B) listing on a government-approved property record if placing a government
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identification tag on the tooling, equipment, or parts is impractical;
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(16) intrastate movements of:
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(a) freight by common carriers; or
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(b) passengers:
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(i) by taxicabs as described in SIC Code 4121 of the 1987 Standard Industrial
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Classification Manual of the federal Executive Office of the President, Office of Management
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and Budget;
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(ii) transported by an establishment described in SIC Code 4111 of the 1987 Standard
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Industrial Classification Manual of the federal Executive Office of the President, Office of
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Management and Budget, if the transportation originates and terminates within a county of the
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first, second, or third class; or
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(iii) transported by the following described in SIC Code 4789 of the 1987 Standard
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Industrial Classification Manual of the federal Executive Office of the President, Office of
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Management and Budget:
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(A) a horse-drawn cab; or
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(B) a horse-drawn carriage;
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(17) sales of newspapers or newspaper subscriptions;
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(18) (a) except as provided in Subsection (18)(b), tangible personal property traded in
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as full or part payment of the purchase price, except that for purposes of calculating sales or use
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tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to other vehicles only, and
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the tax is based upon:
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(i) the bill of sale or other written evidence of value of the vehicle being sold and the
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vehicle being traded in; or
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(ii) in the absence of a bill of sale or other written evidence of value, the then existing
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fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
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commission; and
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(b) notwithstanding Subsection (18)(a), Subsection (18)(a) does not apply to the
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following items of tangible personal property traded in as full or part payment of the purchase
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price:
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(i) money;
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(ii) electricity;
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(iii) water;
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(iv) gas; or
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(v) steam;
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(19) (a) (i) except as provided in Subsection (19)(b), sales of tangible personal property
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used or consumed primarily and directly in farming operations, regardless of whether the
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tangible personal property:
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(A) becomes part of real estate; or
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(B) is installed by a:
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(I) farmer;
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(II) contractor; or
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(III) subcontractor; or
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(ii) sales of parts used in the repairs or renovations of tangible personal property if the
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tangible personal property is exempt under Subsection (19)(a)(i); and
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(b) notwithstanding Subsection (19)(a), amounts paid or charged for the following
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tangible personal property are subject to the taxes imposed by this chapter:
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(i) (A) subject to Subsection (19)(b)(i)(B), the following tangible personal property if
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the tangible personal property is used in a manner that is incidental to farming:
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(I) machinery;
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(II) equipment;
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(III) materials; or
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(IV) supplies; and
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(B) tangible personal property that is considered to be used in a manner that is
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incidental to farming includes:
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(I) hand tools; or
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(II) maintenance and janitorial equipment and supplies;
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(ii) (A) subject to Subsection (19)(b)(ii)(B), tangible personal property if the tangible
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personal property is used in an activity other than farming; and
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(B) tangible personal property that is considered to be used in an activity other than
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farming includes:
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(I) office equipment and supplies; or
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(II) equipment and supplies used in:
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(Aa) the sale or distribution of farm products;
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(Bb) research; or
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(Cc) transportation; or
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(iii) a vehicle required to be registered by the laws of this state during the period ending
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two years after the date of the vehicle's purchase;
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(20) sales of hay;
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(21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or
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other agricultural produce if sold by a producer during the harvest season;
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(22) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
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under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
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(23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
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nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
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wholesaler, or retailer for use in packaging tangible personal property to be sold by that
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manufacturer, processor, wholesaler, or retailer;
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(24) property stored in the state for resale;
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(25) property brought into the state by a nonresident for his or her own personal use or
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enjoyment while within the state, except property purchased for use in Utah by a nonresident
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living and working in Utah at the time of purchase;
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(26) property purchased for resale in this state, in the regular course of business, either
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in its original form or as an ingredient or component part of a manufactured or compounded
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product;
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(27) property upon which a sales or use tax was paid to some other state, or one of its
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subdivisions, except that the state shall be paid any difference between the tax paid and the tax
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imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
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the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
244
Act;
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(28) any sale of a service described in Subsections
59-12-103
(1)(b), (c), and (d) to a
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person for use in compounding a service taxable under the subsections;
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(29) purchases made in accordance with the special supplemental nutrition program for
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women, infants, and children established in 42 U.S.C. Sec. 1786;
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(30) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
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refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
251
of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
252
Manual of the federal Executive Office of the President, Office of Management and Budget;
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(31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
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Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of
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this state and are not thereafter registered or used in this state except as necessary to transport
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them to the borders of this state;
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(32) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah
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where a sales or use tax is not imposed, even if the title is passed in Utah;
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(33) amounts paid for the purchase of telephone service for purposes of providing
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telephone service;
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(34) fares charged to persons transported directly by a public transit district created
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under the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
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(35) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
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(36) (a) 45% of the sales price of any new manufactured home; and
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(b) 100% of the sales price of any used manufactured home;
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(37) sales relating to schools and fundraising sales;
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(38) sales or rentals of durable medical equipment if:
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(a) a person presents a prescription for the durable medical equipment; and
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(b) the durable medical equipment is used for home use only;
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(39) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
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Section
72-11-102
; and
272
(b) the commission shall by rule determine the method for calculating sales exempt
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under Subsection (39)(a) that are not separately metered and accounted for in utility billings;
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(40) sales to a ski resort of:
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(a) snowmaking equipment;
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(b) ski slope grooming equipment;
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(c) passenger ropeways as defined in Section
72-11-102
; or
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(d) parts used in the repairs or renovations of equipment or passenger ropeways
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described in Subsections (40)(a) through (c);
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(41) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
281
(42) sales or rentals of the right to use or operate for amusement, entertainment, or
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recreation a coin-operated amusement device as defined in Section
59-12-102
;
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(43) sales of cleaning or washing of tangible personal property by a coin-operated car
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wash machine;
285
(44) sales by the state or a political subdivision of the state, except state institutions of
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higher education as defined in Section
53B-3-102
, of:
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(a) photocopies; or
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(b) other copies of records held or maintained by the state or a political subdivision of
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the state;
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(45) (a) amounts paid:
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(i) to a person providing intrastate transportation to an employer's employee to or from
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the employee's primary place of employment;
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(ii) by an:
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(A) employee; or
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(B) employer; and
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(iii) pursuant to a written contract between:
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(A) the employer; and
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(B) (I) the employee; or
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(II) a person providing transportation to the employer's employee; and
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(b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
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commission may for purposes of Subsection (45)(a) make rules defining what constitutes an
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employee's primary place of employment;
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(46) amounts paid for admission to an athletic event at an institution of higher
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education that is subject to the provisions of Title IX of the Education Amendments of 1972,
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20 U.S.C. Sec. 1681 et seq.;
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(47) sales of telephone service charged to a prepaid telephone calling card;
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(48) (a) sales of:
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(i) hearing aids;
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(ii) hearing aid accessories; or
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(iii) except as provided in Subsection (48)(b), parts used in the repairs or renovations
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of hearing aids or hearing aid accessories; and
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(b) for purposes of this Subsection (48), notwithstanding Subsection (48)(a)(iii),
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"parts" does not include batteries;
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(49) (a) sales made to or by:
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(i) an area agency on aging; or
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(ii) a senior citizen center owned by a county, city, or town; or
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(b) sales made by a senior citizen center that contracts with an area agency on aging;
318
(50) (a) beginning on July 1, 2001, through June 30, 2007, and subject to Subsection
319
(50)(b), a sale or lease of semiconductor fabricating or processing materials regardless of
320
whether the semiconductor fabricating or processing materials:
321
(i) actually come into contact with a semiconductor; or
322
(ii) ultimately become incorporated into real property;
323
(b) (i) beginning on July 1, 2001, through June 30, 2002, 10% of the sale or lease
324
described in Subsection (50)(a) is exempt;
325
(ii) beginning on July 1, 2002, through June 30, 2003, 50% of the sale or lease
326
described in Subsection (50)(a) is exempt; and
327
(iii) beginning on July 1, 2003, through June 30, 2007, the entire amount of the sale or
328
lease described in Subsection (50)(a) is exempt; and
329
(c) each year on or before the November interim meeting, the Revenue and Taxation
330
Interim Committee shall:
331
(i) review the exemption described in this Subsection (50) and make recommendations
332
concerning whether the exemption should be continued, modified, or repealed; and
333
(ii) include in the review under this Subsection (50)(c):
334
(A) the cost of the exemption;
335
(B) the purpose and effectiveness of the exemption; and
336
(C) the benefits of the exemption to the state;
337
(51) an amount paid by or charged to a purchaser for accommodations and services
338
described in Subsection
59-12-103
(1)(i) to the extent the amount is exempt under Section
339
59-12-104.2
;
340
(52) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
341
sports event registration certificate in accordance with Section
41-3-306
for the event period
342
specified on the temporary sports event registration certificate;
343
(53) sales or uses of electricity, if the sales or uses are:
344
(a) made under a tariff adopted by the Public Service Commission of Utah only for
345
purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
346
source, as designated in the tariff by the Public Service Commission of Utah; and
347
(b) for an amount of electricity that is:
348
(i) unrelated to the amount of electricity used by the person purchasing the electricity
349
under the tariff described in Subsection (53)(a); and
350
(ii) equivalent to the number of kilowatthours specified in the tariff described in
351
Subsection (53)(a) that may be purchased under the tariff described in Subsection (53)(a);
352
(54) sales or rentals of mobility enhancing equipment if a person presents a
353
prescription for the mobility enhancing equipment;
354
(55) sales of water in a:
355
(a) pipe;
356
(b) conduit;
357
(c) ditch; or
358
(d) reservoir;
359
(56) sales of currency or coinage that constitute legal tender of the United States or of a
360
foreign nation;
361
(57) (a) sales of an item described in Subsection (57)(b) if the item:
362
(i) does not constitute legal tender of any nation; and
363
(ii) has a gold, silver, or platinum content of 80% or more; and
364
(b) Subsection (57)(a) applies to a gold, silver, or platinum:
365
(i) ingot;
366
(ii) bar;
367
(iii) medallion; or
368
(iv) decorative coin;
369
(58) amounts paid on a sale-leaseback transaction;
370
(59) sales of a prosthetic device:
371
(a) for use on or in a human;
372
(b) for which a prescription is issued; and
373
(c) to a person that presents a prescription for the prosthetic device;
374
(60) (a) except as provided in Subsection (60)(b), purchases, leases, or rentals of
375
machinery or equipment by an establishment described in Subsection (60)(c) if the machinery
376
or equipment is primarily used in the production or postproduction of the following media for
377
commercial distribution:
378
(i) a motion picture;
379
(ii) a television program;
380
(iii) a movie made for television;
381
(iv) a music video;
382
(v) a commercial;
383
(vi) a documentary; or
384
(vii) a medium similar to Subsections (60)(a)(i) through (vi) as determined by the
385
commission by administrative rule made in accordance with Subsection (60)(d); or
386
(b) notwithstanding Subsection (60)(a), purchases, leases, or rentals of machinery or
387
equipment by an establishment described in Subsection (60)(c) that is used for the production
388
or postproduction of the following are subject to the taxes imposed by this chapter:
389
(i) a live musical performance;
390
(ii) a live news program; or
391
(iii) a live sporting event;
392
(c) the following establishments listed in the 1997 North American Industry
393
Classification System of the federal Executive Office of the President, Office of Management
394
and Budget, apply to Subsections (60)(a) and (b):
395
(i) NAICS Code 512110; or
396
(ii) NAICS Code 51219; and
397
(d) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
398
commission may by rule:
399
(i) prescribe what constitutes a medium similar to Subsections (60)(a)(i) through (vi);
400
or
401
(ii) define:
402
(A) "commercial distribution";
403
(B) "live musical performance";
404
(C) "live news program"; or
405
(D) "live sporting event";
406
(61) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
407
or before June 30, 2009, of machinery or equipment that:
408
(i) is leased or purchased for or by a facility that:
409
(A) is a renewable energy production facility;
410
(B) is located in the state; and
411
(C) (I) becomes operational on or after July 1, 2004; or
412
(II) has its generation capacity increased by one or more megawatts on or after July 1,
413
2004 as a result of the use of the machinery or equipment;
414
(ii) has an economic life of five or more years; and
415
(iii) is used to make the facility or the increase in capacity of the facility described in
416
Subsection (61)(a)(i) operational up to the point of interconnection with an existing
417
transmission grid including:
418
(A) a wind turbine;
419
(B) generating equipment;
420
(C) a control and monitoring system;
421
(D) a power line;
422
(E) substation equipment;
423
(F) lighting;
424
(G) fencing;
425
(H) pipes; or
426
(I) other equipment used for locating a power line or pole; and
427
(b) this Subsection (61) does not apply to:
428
(i) machinery or equipment used in construction of:
429
(A) a new renewable energy production facility; or
430
(B) the increase in the capacity of a renewable energy production facility;
431
(ii) contracted services required for construction and routine maintenance activities;
432
and
433
(iii) unless the machinery or equipment is used or acquired for an increase in capacity
434
of the facility described in Subsection (61)(a)(i)(C)(II), machinery or equipment used or
435
acquired after:
436
(A) the renewable energy production facility described in Subsection (61)(a)(i) is
437
operational as described in Subsection (61)(a)(iii); or
438
(B) the increased capacity described in Subsection (61)(a)(i) is operational as described
439
in Subsection (61)(a)(iii);
440
(62) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
441
or before June 30, 2009, of machinery or equipment that:
442
(i) is leased or purchased for or by a facility that:
443
(A) is a waste energy production facility;
444
(B) is located in the state; and
445
(C) (I) becomes operational on or after July 1, 2004; or
446
(II) has its generation capacity increased by one or more megawatts on or after July 1,
447
2004 as a result of the use of the machinery or equipment;
448
(ii) has an economic life of five or more years; and
449
(iii) is used to make the facility or the increase in capacity of the facility described in
450
Subsection (62)(a)(i) operational up to the point of interconnection with an existing
451
transmission grid including:
452
(A) generating equipment;
453
(B) a control and monitoring system;
454
(C) a power line;
455
(D) substation equipment;
456
(E) lighting;
457
(F) fencing;
458
(G) pipes; or
459
(H) other equipment used for locating a power line or pole; and
460
(b) this Subsection (62) does not apply to:
461
(i) machinery or equipment used in construction of:
462
(A) a new waste energy facility; or
463
(B) the increase in the capacity of a waste energy facility;
464
(ii) contracted services required for construction and routine maintenance activities;
465
and
466
(iii) unless the machinery or equipment is used or acquired for an increase in capacity
467
described in Subsection (62)(a)(i)(C)(II), machinery or equipment used or acquired after:
468
(A) the waste energy facility described in Subsection (62)(a)(i) is operational as
469
described in Subsection (62)(a)(iii); or
470
(B) the increased capacity described in Subsection (62)(a)(i) is operational as described
471
in Subsection (62)(a)(iii);
472
(63) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
473
or before June 30, 2009, of machinery or equipment that:
474
(i) is leased or purchased for or by a facility that:
475
(A) is located in the state;
476
(B) produces fuel from biomass energy including:
477
(I) methanol; or
478
(II) ethanol; and
479
(C) (I) becomes operational on or after July 1, 2004; or
480
(II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
481
a result of the installation of the machinery or equipment;
482
(ii) has an economic life of five or more years; and
483
(iii) is installed on the facility described in Subsection (63)(a)(i);
484
(b) this Subsection (63) does not apply to:
485
(i) machinery or equipment used in construction of:
486
(A) a new facility described in Subsection (63)(a)(i); or
487
(B) the increase in capacity of the facility described in Subsection (63)(a)(i); or
488
(ii) contracted services required for construction and routine maintenance activities;
489
and
490
(iii) unless the machinery or equipment is used or acquired for an increase in capacity
491
described in Subsection (63)(a)(i)(C)(II), machinery or equipment used or acquired after:
492
(A) the facility described in Subsection (63)(a)(i) is operational; or
493
(B) the increased capacity described in Subsection (63)(a)(i) is operational;
494
(64) amounts paid to a purchaser as a rebate from the manufacturer of a new vehicle
495
for purchasing the new vehicle;
496
(65) (a) subject to Subsection (65)(b), sales of tangible personal property to persons
497
within this state that is subsequently shipped outside the state and incorporated pursuant to
498
contract into and becomes a part of real property located outside of this state, except to the
499
extent that the other state or political entity imposes a sales, use, gross receipts, or other similar
500
transaction excise tax on it against which the other state or political entity allows a credit for
501
taxes imposed by this chapter; and
502
(b) the exemption provided for in Subsection (65)(a):
503
(i) is allowed only if the exemption is applied:
504
(A) in calculating the purchase price of the tangible personal property; and
505
(B) to a written contract that is in effect on July 1, 2004; and
506
(ii) (A) does not apply beginning on the day on which the contract described in
507
Subsection (65)(b)(i):
508
(I) is substantially modified; or
509
(II) terminates; and
510
(B) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
511
the commission may by rule prescribe the circumstances under which a contract is substantially
512
modified;
513
(66) purchases:
514
(a) of one or more of the following items in printed or electronic format:
515
(i) a list containing information that includes one or more:
516
(A) names; or
517
(B) addresses; or
518
(ii) a database containing information that includes one or more:
519
(A) names; or
520
(B) addresses; and
521
(b) used to send direct mail; [and]
522
(67) redemptions or repurchases of property by a person if that property was:
523
(a) delivered to a pawnbroker as part of a pawn transaction; and
524
(b) redeemed or repurchased within the time period established in a written agreement
525
between the person and the pawnbroker for redeeming or repurchasing the property[.]; and
526
(68) sales of food and food ingredients.
527
Section 2.
Section
59-12-204 (Effective 07/01/06)
is amended to read:
528
59-12-204 (Effective 07/01/06). Sales and use tax ordinance provisions -- Tax rate
529
-- Distribution of tax revenues.
530
(1) The tax ordinance adopted pursuant to this part shall impose a tax upon those
531
transactions listed in Subsection
59-12-103
(1).
532
(2) (a) Except as provided in Subsections (2)(b) and
59-12-207.1
(7)(c), the tax
533
ordinance under Subsection (1) shall include a provision imposing a tax upon every transaction
534
listed in Subsection
59-12-103
(1) made within a county, including areas contained within the
535
cities and towns located in the county:
536
(i) at the rate of [1%] 1.1% of the purchase price paid or charged; and
537
(ii) if the transaction is consummated within the county in accordance with Section
538
59-12-205
.
539
(b) Notwithstanding Subsection (2)(a), a tax ordinance under this Subsection (2) shall
540
include a provision prohibiting a county, city, or town from imposing a tax under this section
541
on the sales and uses described in Section
59-12-104
to the extent the sales and uses are
542
exempt from taxation under Section
59-12-104
.
543
(3) Such tax ordinance shall include provisions substantially the same as those
544
contained in Part 1, Tax Collection, insofar as they relate to sales or use tax, except that the
545
name of the county as the taxing agency shall be substituted for that of the state where
546
necessary for the purpose of this part and that an additional license is not required if one has
547
been or is issued under Section
59-12-106
.
548
(4) Such tax ordinance shall include a provision that the county shall contract, prior to
549
the effective date of the ordinance, with the commission to perform all functions incident to the
550
administration or operation of the ordinance.
551
(5) Such tax ordinance shall include a provision that the sale, storage, use, or other
552
consumption of tangible personal property, the purchase price or the cost of which has been
553
subject to sales or use tax under a sales and use tax ordinance enacted in accordance with this
554
part by any county, city, or town in any other county in this state, shall be exempt from the tax
555
due under this ordinance.
556
(6) Such tax ordinance shall include a provision that any person subject to the
557
provisions of a city or town sales and use tax shall be exempt from the county sales and use tax
558
if the city or town sales and use tax is levied under an ordinance including provisions in
559
substance as follows:
560
(a) a provision imposing a tax upon every transaction listed in Section
59-12-103
made
561
within the city or town at the rate imposed by the county in which it is situated pursuant to
562
Subsection (2);
563
(b) provisions substantially the same as those contained in Part 1, Tax Collection,
564
insofar as they relate to sales and use taxes, except that the name of the city or town as the
565
taxing agency shall be substituted for that of the state where necessary for the purposes of this
566
part;
567
(c) a provision that the city or town shall contract prior to the effective date of the city
568
or town sales and use tax ordinance with the commission to perform all functions incident to
569
the administration or operation of the sales and use tax ordinance of the city or town;
570
(d) a provision that the sale, storage, use, or other consumption of tangible personal
571
property, the gross receipts from the sale of or the cost of which has been subject to sales or use
572
tax under a sales and use tax ordinance enacted in accordance with this part by any county
573
other than the county in which the city or town is located, or city or town in this state, shall be
574
exempt from the tax; and
575
(e) a provision that the amount of any tax paid under Part 1, Tax Collection, shall not
576
be included as a part of the purchase price paid or charged for a taxable item.
577
(7) (a) Notwithstanding any other provision of this section, beginning on July 1, 1999,
578
through May 5, 2003, the commission shall:
579
(i) determine and retain the portion of the sales and use tax imposed under this section:
580
(A) by a city or town that will have constructed within its boundaries the Airport to
581
University of Utah Light Rail described in the Transportation Equity Act for the 21st Century,
582
Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
583
(B) that is equal to the revenues generated by a 1/64% tax rate; and
584
(ii) deposit the revenues described in Subsection (7)(a)(i) in the Airport to University
585
of Utah Light Rail Restricted Account created in Section
17A-2-1064
for the purposes
586
described in Section
17A-2-1064
.
587
(b) Notwithstanding any other provision of this section, beginning July 1, 2000, the
588
commission shall:
589
(i) determine and retain the portion of sales and use tax imposed under this section:
590
(A) by each county and by each city and town within that county whose legislative
591
body consents by resolution to the commission's retaining and depositing sales and use tax
592
revenues as provided in this Subsection (7)(b); and
593
(B) that is equal to the revenues generated by a 1/64% tax rate;
594
(ii) deposit the revenues described in Subsection (7)(b)(i) into a special fund of the
595
county, or a city, town, or other political subdivision of the state located within that county, that
596
has issued bonds to finance sports or recreational facilities or that is leasing sports or
597
recreational facilities, in order to repay those bonds or to pay the lease payments; and
598
(iii) continue to deposit those revenues into the special fund only as long as the bonds
599
or leases are outstanding.
600
Section 3.
Section
59-12-1102 (See 59-1-1201 re: Eff)
is amended to read:
601
59-12-1102 (See 59-1-1201 re: Eff). Base -- Rate -- Imposition of tax --
602
Distribution of revenue -- Administration -- Enactment or repeal of tax -- Effective date --
603
Notice requirements.
604
(1) (a) (i) Except as provided in Subsections (1)(a)(ii) and
59-12-207.1
(7)(c), subject to
605
the provisions of Subsections (2) through (5), and in addition to any other tax authorized by
606
this chapter, a county may impose by ordinance a county option sales and use tax of [.25%]
607
.28% upon the transactions described in Subsection
59-12-103
(1).
608
(ii) Notwithstanding Subsection (1)(a)(i), a county may not impose a tax under this
609
section on the sales and uses described in Section
59-12-104
to the extent the sales and uses are
610
exempt from taxation under Section
59-12-104
.
611
(b) For purposes of this Subsection (1), the location of a transaction shall be
612
determined in accordance with Sections
59-12-207.1
through
59-12-207.4
.
613
(c) The county option sales and use tax under this section shall be imposed:
614
(i) upon transactions that are located within the county, including transactions that are
615
located within municipalities in the county; and
616
(ii) except as provided in Subsection (1)(d) or (5), beginning on the first day of
617
January:
618
(A) of the next calendar year after adoption of the ordinance imposing the tax if the
619
ordinance is adopted on or before May 25; or
620
(B) of the second calendar year after adoption of the ordinance imposing the tax if the
621
ordinance is adopted after May 25.
622
(d) Notwithstanding Subsection (1)(c)(ii), the county option sales and use tax under
623
this section shall be imposed:
624
(i) beginning January 1, 1998, if an ordinance adopting the tax imposed on or before
625
September 4, 1997; or
626
(ii) beginning January 1, 1999, if an ordinance adopting the tax is imposed during 1997
627
but after September 4, 1997.
628
(2) (a) Before imposing a county option sales and use tax under Subsection (1), a
629
county shall hold two public hearings on separate days in geographically diverse locations in
630
the county.
631
(b) (i) At least one of the hearings required by Subsection (2)(a) shall have a starting
632
time of no earlier than 6 p.m.
633
(ii) The earlier of the hearings required by Subsection (2)(a) shall be no less than seven
634
days after the day the first advertisement required by Subsection (2)(c) is published.
635
(c) (i) Before holding the public hearings required by Subsection (2)(a), the county
636
shall advertise in a newspaper of general circulation in the county:
637
(A) its intent to adopt a county option sales and use tax;
638
(B) the date, time, and location of each public hearing; and
639
(C) a statement that the purpose of each public hearing is to obtain public comments
640
regarding the proposed tax.
641
(ii) The advertisement shall be published once each week for the two weeks preceding
642
the earlier of the two public hearings.
643
(iii) The advertisement shall be no less than 1/8 page in size, and the type used shall be
644
no smaller than 18 point and surrounded by a 1/4-inch border.
645
(iv) The advertisement may not be placed in that portion of the newspaper where legal
646
notices and classified advertisements appear.
647
(v) Whenever possible:
648
(A) the advertisement shall appear in a newspaper that is published at least five days a
649
week, unless the only newspaper in the county is published less than five days a week; and
650
(B) the newspaper selected shall be one of general interest and readership in the
651
community, and not one of limited subject matter.
652
(d) The adoption of an ordinance imposing a county option sales and use tax is subject
653
to a local referendum election as provided in Title 20A, Chapter 7, Part 6, Local Referenda -
654
Procedures, except that:
655
(i) notwithstanding Subsection
20A-7-609
(2)(a), the county clerk shall hold a
656
referendum election that qualifies for the ballot on the earlier of the next regular general
657
election date or the next municipal general election date more than 155 days after adoption of
658
an ordinance under this section;
659
(ii) for 1997 only, the 120-day period in Subsection
20A-7-606
(1) shall be 30 days; and
660
(iii) the deadlines in Subsections
20A-7-606
(2) and (3) do not apply, and the clerk shall
661
take the actions required by those subsections before the referendum election.
662
(3) (a) If the aggregate population of the counties imposing a county option sales and
663
use tax under Subsection (1) is less than 75% of the state population, the tax levied under
664
Subsection (1) shall be distributed to the county in which the tax was collected.
665
(b) If the aggregate population of the counties imposing a county option sales and use
666
tax under Subsection (1) is greater than or equal to 75% of the state population:
667
(i) 50% of the tax collected under Subsection (1) in each county shall be distributed to
668
the county in which the tax was collected; and
669
(ii) except as provided in Subsection (3)(c), 50% of the tax collected under Subsection
670
(1) in each county shall be distributed proportionately among all counties imposing the tax,
671
based on the total population of each county.
672
(c) If the amount to be distributed annually to a county under Subsection (3)(b)(ii),
673
when combined with the amount distributed to the county under Subsection (3)(b)(i), does not
674
equal at least $75,000, then:
675
(i) the amount to be distributed annually to that county under Subsection (3)(b)(ii) shall
676
be increased so that, when combined with the amount distributed to the county under
677
Subsection (3)(b)(i), the amount distributed annually to the county is $75,000; and
678
(ii) the amount to be distributed annually to all other counties under Subsection
679
(3)(b)(ii) shall be reduced proportionately to offset the additional amount distributed under
680
Subsection (3)(c)(i).
681
(d) The commission shall establish rules to implement the distribution of the tax under
682
Subsections (3)(a), (b), and (c).
683
(4) (a) Except as provided in Subsection (4)(b) or (c), a tax authorized under this part
684
shall be administered, collected, and enforced in accordance with:
685
(i) the same procedures used to administer, collect, and enforce the tax under:
686
(A) Part 1, Tax Collection; or
687
(B) Part 2, Local Sales and Use Tax Act; and
688
(ii) Chapter 1, General Taxation Policies.
689
(b) Notwithstanding Subsection (4)(a), a tax under this part is not subject to
690
Subsections
59-12-205
(2) through (9).
691
(c) Notwithstanding Subsection (4)(a), the fee charged by the commission under
692
Section
59-12-206
shall be based on the distribution amounts resulting after all the applicable
693
distribution calculations under Subsection (3) have been made.
694
(5) (a) For purposes of this Subsection (5):
695
(i) "Annexation" means an annexation to a county under Title 17, Chapter 2,
696
Annexation to County.
697
(ii) "Annexing area" means an area that is annexed into a county.
698
(b) (i) Except as provided in Subsection (5)(c) or (d), if, on or after July 1, 2004, a
699
county enacts or repeals a tax under this part:
700
(A) (I) the enactment shall take effect as provided in Subsection (1)(c); or
701
(II) the repeal shall take effect on the first day of a calendar quarter; and
702
(B) after a 90-day period beginning on the date the commission receives notice meeting
703
the requirements of Subsection (5)(b)(ii) from the county.
704
(ii) The notice described in Subsection (5)(b)(i)(B) shall state:
705
(A) that the county will enact or repeal a tax under this part;
706
(B) the statutory authority for the tax described in Subsection (5)(b)(ii)(A);
707
(C) the effective date of the tax described in Subsection (5)(b)(ii)(A); and
708
(D) if the county enacts the tax described in Subsection (5)(b)(ii)(A), the rate of the
709
tax.
710
(c) (i) Notwithstanding Subsection (5)(b)(i), for a transaction described in Subsection
711
(5)(c)(iii), the enactment of a tax shall take effect on the first day of the first billing period:
712
(A) that begins after the effective date of the enactment of the tax; and
713
(B) if the billing period for the transaction begins before the effective date of the
714
enactment of the tax under Subsection (1).
715
(ii) Notwithstanding Subsection (5)(b)(i), for a transaction described in Subsection
716
(5)(c)(iii), the repeal of a tax shall take effect on the first day of the last billing period:
717
(A) that began before the effective date of the repeal of the tax; and
718
(B) if the billing period for the transaction begins before the effective date of the repeal
719
of the tax imposed under Subsection (1).
720
(iii) Subsections (5)(c)(i) and (ii) apply to transactions subject to a tax under:
721
(A) Subsection
59-12-103
(1)(b);
722
(B) Subsection
59-12-103
(1)(c);
723
(C) Subsection
59-12-103
(1)(d);
724
(D) Subsection
59-12-103
(1)(e);
725
(E) Subsection
59-12-103
(1)(f);
726
(F) Subsection
59-12-103
(1)(g);
727
(G) Subsection
59-12-103
(1)(h);
728
(H) Subsection
59-12-103
(1)(i);
729
(I) Subsection
59-12-103
(1)(j); or
730
(J) Subsection
59-12-103
(1)(k).
731
(d) (i) Notwithstanding Subsection (5)(b)(i), if a tax due under this chapter on a
732
catalogue sale is computed on the basis of sales and use tax rates published in the catalogue, an
733
enactment or repeal of a tax described in Subsection (5)(b)(i) takes effect:
734
(A) on the first day of a calendar quarter; and
735
(B) beginning 60 days after the effective date of the enactment or repeal under
736
Subsection (5)(b)(i).
737
(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
738
the commission may by rule define the term "catalogue sale."
739
(e) (i) Except as provided in Subsection (5)(f) or (g), if, for an annexation that occurs
740
on or after July 1, 2004, the annexation will result in the enactment or repeal of a tax under this
741
part for an annexing area, the enactment or repeal shall take effect:
742
(A) on the first day of a calendar quarter; and
743
(B) after a 90-day period beginning on the date the commission receives notice meeting
744
the requirements of Subsection (5)(e)(ii) from the county that annexes the annexing area.
745
(ii) The notice described in Subsection (5)(e)(i)(B) shall state:
746
(A) that the annexation described in Subsection (5)(e)(i) will result in an enactment or
747
repeal of a tax under this part for the annexing area;
748
(B) the statutory authority for the tax described in Subsection (5)(e)(ii)(A);
749
(C) the effective date of the tax described in Subsection (5)(e)(ii)(A); and
750
(D) the rate of the tax described in Subsection (5)(e)(ii)(A).
751
(f) (i) Notwithstanding Subsection (5)(e)(i), for a transaction described in Subsection
752
(5)(f)(iii), the enactment of a tax shall take effect on the first day of the first billing period:
753
(A) that begins after the effective date of the enactment of the tax; and
754
(B) if the billing period for the transaction begins before the effective date of the
755
enactment of the tax under Subsection (1).
756
(ii) Notwithstanding Subsection (5)(e)(i), for a transaction described in Subsection
757
(5)(f)(iii), the repeal of a tax shall take effect on the first day of the last billing period:
758
(A) that began before the effective date of the repeal of the tax; and
759
(B) if the billing period for the transaction begins before the effective date of the repeal
760
of the tax imposed under Subsection (1).
761
(iii) Subsections (5)(f)(i) and (ii) apply to transactions subject to a tax under:
762
(A) Subsection
59-12-103
(1)(b);
763
(B) Subsection
59-12-103
(1)(c);
764
(C) Subsection
59-12-103
(1)(d);
765
(D) Subsection
59-12-103
(1)(e);
766
(E) Subsection
59-12-103
(1)(f);
767
(F) Subsection
59-12-103
(1)(g);
768
(G) Subsection
59-12-103
(1)(h);
769
(H) Subsection
59-12-103
(1)(i);
770
(I) Subsection
59-12-103
(1)(j); or
771
(J) Subsection
59-12-103
(1)(k).
772
(g) (i) Notwithstanding Subsection (5)(e)(i), if a tax due under this chapter on a
773
catalogue sale is computed on the basis of sales and use tax rates published in the catalogue, an
774
enactment or repeal of a tax described in Subsection (5)(e)(i) takes effect:
775
(A) on the first day of a calendar quarter; and
776
(B) beginning 60 days after the effective date of the enactment or repeal under
777
Subsection (5)(e)(i).
778
(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
779
the commission may by rule define the term "catalogue sale."
780
Section 4. Effective date.
781
This bill takes effect on July 1, 2006.
Legislative Review Note
as of 1-13-06 11:32 AM
Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.