3rd Sub. H.B. 54
LEGISLATIVE GENERAL COUNSEL
6 Approved for Filing: A.V. Arthur 6
6 03-01-23 4:26 PM 6
H.B. 54
3rd Sub. (Cherry)
Senator Daniel McCay proposes the following substitute bill:
1 TAX AND FEE REVISIONS
2 2023 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Steve Eliason
5 Senate Sponsor: Daniel McCay
6Cosponsors:
7Nelson T. Abbott
8Carl R. Albrecht
9Melissa G. Ballard
10Brady Brammer
11Walt Brooks
12Kay J. Christofferson
13Tyler Clancy
14Paul A. Cutler
15Jon Hawkins
16Ken Ivory
17Colin W. Jack
Dan N. Johnson
Jason Kyle
Karianne Lisonbee
Anthony E. Loubet
Steven J. Lund
Jefferson Moss
Calvin R. Musselman
Michael J. Petersen
Karen M. Peterson
Thomas W. Peterson
Val L. Peterson
Candice B. Pierucci
Susan Pulsipher
Judy Weeks Rohner
Mike Schultz
Rex P. Shipp
Casey Snider
Robert M. Spendlove
Keven J. Stratton
Mark A. Strong
Jordan D. Teuscher
Douglas R. Welton
Stephen L. Whyte
Ryan D. Wilcox
18
19LONG TITLE
20General Description:
21 This bill modifies state tax and fee provisions.
22Highlighted Provisions:
23 This bill:
*HB0054S03* 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
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24 <authorizes a temporary increase in the license plate fee;
25 <amends the corporate franchise and income tax rates;
26 <amends the individual income tax rate;
27 <adds to the taxpayer tax credit an additional Utah personal exemption in the year of
28a qualifying dependent's birth;
29 <expands eligibility for the social security benefits tax credit by increasing the
30thresholds for the income-based phaseout;
31 <modifies the calculation of the earned income tax credit;
32 <removes the state sales and use tax imposed on amounts paid or charged for food
33and food ingredients; and
34 <makes technical and conforming changes.
35Money Appropriated in this Bill:
36 None
37Other Special Clauses:
38 This bill provides a special effective date.
39 This bill provides retrospective operation.
40Utah Code Sections Affected:
41AMENDS:
42 41-1a-1211, as last amended by Laws of Utah 2015, Chapter 119
43 59-7-104, as last amended by Laws of Utah 2022, Chapter 12
44 59-7-201, as last amended by Laws of Utah 2022, Chapter 12
45 59-10-104, as last amended by Laws of Utah 2022, Chapter 12
46 59-10-1018, as last amended by Laws of Utah 2021, Chapter 75
47 59-10-1042, as last amended by Laws of Utah 2022, Chapters 12, 258
48 59-10-1044, as enacted by Laws of Utah 2022, Chapter 12
49 59-12-102, as last amended by Laws of Utah 2021, Chapters 64, 367 and 414 and last
50amended by Coordination Clause, Laws of Utah 2021, Chapter 367
51 59-12-103, as last amended by Laws of Utah 2022, Chapters 77, 106 and 433
52 59-12-108, as last amended by Laws of Utah 2020, Chapters 294, 407
53 63N-2-502, as last amended by Laws of Utah 2020, Chapter 407
54 63N-7-301, as last amended by Laws of Utah 2022, Chapters 274, 362 and last 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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55amended by Coordination Clause, Laws of Utah 2022, Chapter 362
56
57Be it enacted by the Legislature of the state of Utah:
58 Section 1. Section 41-1a-1211 is amended to read:
59 41-1a-1211. License plate fees -- Application fees for issuance and renewal of
60personalized and special group license plates -- Replacement fee for license plates --
61Postage fees.
62 (1) (a) Except as provided in Subsections (11), (12), (13), and (14), a license plate fee
63established in accordance with Section 63J-1-504 shall be paid to the division for the issuance
64of any new license plate under Part 4, License Plates and Registration Indicia.
65 (b) The license plate fee shall be deposited as follows:
66 (i) $1 in the Transportation Fund; and
67 (ii) the remainder of the fee charged under Subsection (1)(a), as provided in Section
6841-1a-1201.
69 (2) An applicant for original issuance of personalized license plates issued under
70Section 41-1a-410 shall pay a $50 per set license plate application fee in addition to the fee
71required in Subsection (1).
72 (3) Beginning July 1, 2003, a person who applies for a special group license plate shall
73pay a $5 fee for the original set of license plates in addition to the fee required under
74Subsection (1).
75 (4) An applicant for original issuance of personalized special group license plates shall
76pay the license plate application fees required in Subsection (2) in addition to the license plate
77fees and license plate application fees established under Subsections (1) and (3).
78 (5) An applicant for renewal of personalized license plates issued under Section
7941-1a-410 shall pay a $10 per set application fee.
80 (6) (a) The division may charge a fee established under Section 63J-1-504 to recover
81the costs for the replacement of any license plate issued under Part 4, License Plates and
82Registration Indicia.
83 (b) The license plate fee shall be deposited as follows:
84 (i) $1 in the Transportation Fund; and
85 (ii) the remainder of the fee charged under Subsection (6)(a), as provided in Section 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
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8641-1a-1201.
87 (7) The division may charge a fee established under Section 63J-1-504 to recover its
88costs for the replacement of decals issued under Section 41-1a-418.
89 (8) The division may charge a fee established under Section 63J-1-504 to recover the
90cost of issuing stickers under Section 41-1a-416.
91 (9) In addition to any other fees required by this section, the division shall assess a fee
92established under Section 63J-1-504 to cover postage expenses if new or replacement license
93plates are mailed to the applicant.
94 (10) The fees required under this section are separate from and in addition to
95registration fees required under Section 41-1a-1206.
96 (11) (a) An applicant for a license plate issued under Section 41-1a-407 is not subject
97to the license plate fee under Subsection (1).
98 (b) An applicant for a Purple Heart special group license plate issued in accordance
99with Section 41-1a-421 is exempt from the fees under Subsections (1), (3), and (7).
100 (12) A person is exempt from the fee under Subsection (1) or (6) if the person:
101 (a) was issued a clean fuel special group license plate in accordance with Section
10241-1a-418 prior to the effective date of rules made by the Department of Transportation under
103Subsection 41-6a-702(5)(b);
104 (b) beginning on the effective date of rules made by the Department of Transportation
105authorized under Subsection 41-6a-702(5)(b), is no longer eligible for a clean fuel special
106group license plate under the rules made by the Department of Transportation; and
107 (c) upon renewal or reissuance, is required to replace the clean fuel special group
108license plate with a new license plate.
109 (13) Until June 30, 2011, a person is exempt from the license plate fee under
110Subsection (1) or (6) if the person:
111 (a) was issued a firefighter recognition special group license plate in accordance with
112Section 41-1a-418 prior to July 1, 2009;
113 (b) upon renewal of the person's vehicle registration on or after July 1, 2009, is not a
114contributor to the Firefighter Support Restricted Account as required under Section 41-1a-418;
115and
116 (c) is required to replace the firefighter special group license plate with a new license 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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117plate in accordance with Section 41-1a-418.
118 (14) A person is not subject to the license plate fee under Subsection (1) if the person
119presents official documentation that the person is a recipient of the Purple Heart Award issued:
120 (a) by a recognized association representing peace officers who:
121 (i) receives a salary from a federal, state, county, or municipal government or any
122subdivision of the state; and
123 (ii) works in the state; or
124 (b) in accordance with Subsection 41-1a-421(2).
125 (15) (a) For the time period beginning on July 1, 2023, and ending on June 30, 2024,
126the commission may charge a $1 license plate fee to cover additional plate costs.
127 (b) The license plate fee authorized under Subsection (15)(a) is in addition to the
128license plate fee the division establishes in accordance with Subsection (1).
129 Section 2. Section 59-7-104 is amended to read:
130 59-7-104. Tax -- Minimum tax.
131 (1) Each domestic and foreign corporation, except a corporation that is exempt under
132Section 59-7-102, shall pay an annual tax to the state based on the corporation's Utah taxable
133income for the taxable year for the privilege of exercising the corporation's corporate franchise
134or for the privilege of doing business in the state.
135 (2) The tax shall be [4.85] 4.65% of a corporation's Utah taxable income.
136 (3) The minimum tax a corporation shall pay under this chapter is $100.
137 Section 3. Section 59-7-201 is amended to read:
138 59-7-201. Tax -- Minimum tax.
139 (1) There is imposed upon each corporation, except a corporation that is exempt under
140Section 59-7-102, a tax upon the corporation's Utah taxable income for the taxable year that is
141derived from sources within this state other than income for any period that the corporation is
142required to include in the corporation's tax base under Section 59-7-104.
143 (2) The tax imposed by Subsection (1) shall be [4.85] 4.65% of a corporation's Utah
144taxable income.
145 (3) In no case shall the tax be less than $100.
146 Section 4. Section 59-10-104 is amended to read:
147 59-10-104. Tax basis -- Tax rate -- Exemption. 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
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148 (1) A tax is imposed on the state taxable income of a resident individual as provided in
149this section.
150 (2) For purposes of Subsection (1), for a taxable year, the tax is an amount equal to the
151product of:
152 (a) the resident individual's state taxable income for that taxable year; and
153 (b) [4.85] 4.65%.
154 (3) This section does not apply to a resident individual exempt from taxation under
155Section 59-10-104.1.
156 Section 5. Section 59-10-1018 is amended to read:
157 59-10-1018. Definitions -- Nonrefundable taxpayer tax credits.
158 (1) As used in this section:
159 (a) "Head of household filing status" means a head of household, as defined in Section
1602(b), Internal Revenue Code, who files a single federal individual income tax return for the
161taxable year.
162 (b) "Joint filing status" means:
163 (i) spouses who file a single return jointly under this chapter for a taxable year; or
164 (ii) a surviving spouse, as defined in Section 2(a), Internal Revenue Code, who files a
165single federal individual income tax return for the taxable year.
166 (c) "Qualifying dependent" means an individual with respect to whom the claimant is
167allowed to claim a tax credit under Section 24, Internal Revenue Code, on the claimant's
168federal individual income tax return for the taxable year.
169 (d) "Single filing status" means:
170 (i) a single individual who files a single federal individual income tax return for the
171taxable year; or
172 (ii) a married individual who:
173 (A) does not file a single federal individual income tax return jointly with that married
174individual's spouse for the taxable year; and
175 (B) files a single federal individual income tax return for the taxable year.
176 (e) "State or local income tax" means the lesser of:
177 (i) the amount of state or local income tax that the claimant:
178 (A) pays for the taxable year; and 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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179 (B) reports on the claimant's federal individual income tax return for the taxable year,
180regardless of whether the claimant is allowed an itemized deduction on the claimant's federal
181individual income tax return for the taxable year for the full amount of state or local income tax
182paid; and
183 (ii) $10,000.
184 (f) (i) "Utah itemized deduction" means the amount the claimant deducts as allowed as
185an itemized deduction on the claimant's federal individual income tax return for that taxable
186year minus any amount of state or local income tax for the taxable year.
187 (ii) "Utah itemized deduction" does not include any amount of qualified business
188income that the claimant subtracts as allowed by Section 199A, Internal Revenue Code, on the
189claimant's federal income tax return for that taxable year.
190 (g) "Utah personal exemption" means, subject to Subsection (6), $1,750 multiplied by
191the number of the claimant's qualifying dependents plus an additional qualifying dependent in
192the year of a qualifying dependent's birth.
193 (2) Except as provided in Section 59-10-1002.2, and subject to Subsections (3) through
194(5), a claimant may claim a nonrefundable tax credit against taxes otherwise due under this part
195equal to the sum of:
196 (a) (i) for a claimant that deducts the standard deduction on the claimant's federal
197individual income tax return for the taxable year, 6% of the amount the claimant deducts as
198allowed as the standard deduction on the claimant's federal individual income tax return for
199that taxable year; or
200 (ii) for a claimant that itemizes deductions on the claimant's federal individual income
201tax return for the taxable year, 6% of the amount of the claimant's Utah itemized deduction;
202and
203 (b) 6% of the claimant's Utah personal exemption.
204 (3) A claimant may not carry forward or carry back a tax credit under this section.
205 (4) The tax credit allowed by Subsection (2) shall be reduced by $.013 for each dollar
206by which a claimant's state taxable income exceeds:
207 (a) for a claimant who has a single filing status, $15,095;
208 (b) for a claimant who has a head of household filing status, $22,643; or
209 (c) for a claimant who has a joint filing status, $30,190. 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
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210 (5) (a) For a taxable year beginning on or after January 1, 2022, the commission shall
211increase or decrease annually the following dollar amounts by a percentage equal to the
212percentage difference between the consumer price index for the preceding calendar year and
213the consumer price index for calendar year 2020:
214 (i) the dollar amount listed in Subsection (4)(a); and
215 (ii) the dollar amount listed in Subsection (4)(b).
216 (b) After the commission increases or decreases the dollar amounts listed in Subsection
217(5)(a), the commission shall round those dollar amounts listed in Subsection (5)(a) to the
218nearest whole dollar.
219 (c) After the commission rounds the dollar amounts as required by Subsection (5)(b),
220the commission shall increase or decrease the dollar amount listed in Subsection (4)(c) so that
221the dollar amount listed in Subsection (4)(c) is equal to the product of:
222 (i) the dollar amount listed in Subsection (4)(a); and
223 (ii) two.
224 (d) For purposes of Subsection (5)(a), the commission shall calculate the consumer
225price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
226 (6) (a) For a taxable year beginning on or after January 1, 2022, the commission shall
227increase annually the Utah personal exemption amount listed in Subsection (1)(g) by a
228percentage equal to the percentage by which the consumer price index for the preceding
229calendar year exceeds the consumer price index for calendar year 2020.
230 (b) After the commission increases the Utah personal exemption amount as described
231in Subsection (6)(a), the commission shall round the Utah personal exemption amount to the
232nearest whole dollar.
233 (c) For purposes of Subsection (6)(a), the commission shall calculate the consumer
234price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
235 Section 6. Section 59-10-1042 is amended to read:
236 59-10-1042. Nonrefundable tax credit for social security benefits.
237 (1) As used in this section:
238 (a) "Head of household filing status" means the same as that term is defined in Section
23959-10-1018.
240 (b) "Joint filing status" means the same as that term is defined in Section 59-10-1018. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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241 (c) "Married filing separately status" means a married individual who:
242 (i) does not file a single federal individual income tax return jointly with that married
243individual's spouse for the taxable year; and
244 (ii) files a single federal individual income tax return for the taxable year.
245 (d) "Modified adjusted gross income" means the sum of the following for a claimant
246or, if the claimant's return under this chapter is allowed a joint filing status, the claimant and
247the claimant's spouse:
248 (i) adjusted gross income for the taxable year for which a tax credit is claimed under
249this section;
250 (ii) any interest income that is not included in adjusted gross income for the taxable
251year described in Subsection (1)(d)(i); and
252 (iii) any addition to adjusted gross income required by Section 59-10-114 for the
253taxable year described in Subsection (1)(d)(i).
254 (e) "Single filing status" means a single individual who files a single federal individual
255income tax return for the taxable year.
256 (f) "Social security benefit" means an amount received by a claimant as a monthly
257benefit in accordance with the Social Security Act, 42 U.S.C. Sec. 401 et seq.
258 (2) Except as provided in Section 59-10-1002.2 and Subsections (3) and (4), each
259claimant on a return that receives a social security benefit may claim a nonrefundable tax credit
260against taxes otherwise due under this part equal to the product of:
261 (a) the percentage listed in Subsection 59-10-104(2); and
262 (b) the claimant's social security benefit that is included in adjusted gross income on
263the claimant's federal income tax return for the taxable year.
264 (3) A claimant may not:
265 (a) carry forward or carry back the amount of a tax credit under this section that
266exceeds the claimant's tax liability for the taxable year; or
267 (b) claim a tax credit under this section for a taxable year if a tax credit under Section
26859-10-1019 is claimed on the claimant's return for the same taxable year.
269 (4) The tax credit allowed by Subsection (2) claimed on a return filed under this part
270shall be reduced by $.025 for each dollar by which modified adjusted gross income for
271purposes of the return exceeds: 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
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272 (a) for a federal individual income tax return that is allowed a married filing separately
273status, [$31,000] $37,500;
274 (b) for a federal individual income tax return that is allowed a single filing status,
275[$37,000] $45,000;
276 (c) for a federal individual income tax return that is allowed a head of household filing
277status, [$62,000] $75,000; or
278 (d) for a return under this chapter that is allowed a joint filing status, [$62,000]
279$75,000.
280 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
281commission may make rules governing the calculation and method for claiming the tax credit
282described in this section.
283 Section 7. Section 59-10-1044 is amended to read:
284 59-10-1044. Nonrefundable earned income tax credit.
285 (1) As used in this section:
286 (a) "Federal earned income tax credit" means the federal earned income tax credit
287described in Section 32, Internal Revenue Code.
288 (b) "Qualifying claimant" means a resident or nonresident individual who:
289 (i) qualifies for and claims the federal earned income tax credit for the current taxable
290year[.]; and
291 (ii) earns income in Utah that is reported on a W-2 form.
292 (2) Subject to Section 59-10-1002.2, a qualifying claimant may claim a nonrefundable
293earned income tax credit equal to the lesser of:
294 (a) [15] 20% of the amount of the federal earned income tax credit that the qualifying
295claimant was entitled to claim on a federal income tax return for the current taxable year[.]; and
296 (b) the total Utah wages reported on the qualifying claimant's W-2 form for the current
297taxable year.
298 (3) A qualifying claimant may not carry forward or carry back the amount of the earned
299income tax credit that exceeds the qualifying claimant's tax liability.
300 Section 8. Section 59-12-102 is amended to read:
301 59-12-102. Definitions.
302 As used in this chapter: 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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303 (1) "800 service" means a telecommunications service that:
304 (a) allows a caller to dial a toll-free number without incurring a charge for the call; and
305 (b) is typically marketed:
306 (i) under the name 800 toll-free calling;
307 (ii) under the name 855 toll-free calling;
308 (iii) under the name 866 toll-free calling;
309 (iv) under the name 877 toll-free calling;
310 (v) under the name 888 toll-free calling; or
311 (vi) under a name similar to Subsections (1)(b)(i) through (v) as designated by the
312Federal Communications Commission.
313 (2) (a) "900 service" means an inbound toll telecommunications service that:
314 (i) a subscriber purchases;
315 (ii) allows a customer of the subscriber described in Subsection (2)(a)(i) to call in to
316the subscriber's:
317 (A) prerecorded announcement; or
318 (B) live service; and
319 (iii) is typically marketed:
320 (A) under the name 900 service; or
321 (B) under a name similar to Subsection (2)(a)(iii)(A) as designated by the Federal
322Communications Commission.
323 (b) "900 service" does not include a charge for:
324 (i) a collection service a seller of a telecommunications service provides to a
325subscriber; or
326 (ii) the following a subscriber sells to the subscriber's customer:
327 (A) a product; or
328 (B) a service.
329 (3) (a) "Admission or user fees" includes season passes.
330 (b) "Admission or user fees" does not include:
331 (i) annual membership dues to private organizations; or
332 (ii) a lesson, including a lesson that involves as part of the lesson equipment or a
333facility listed in Subsection 59-12-103(1)(f). 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
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334 (4) "Affiliate" or "affiliated person" means a person that, with respect to another
335person:
336 (a) has an ownership interest of more than 5%, whether direct or indirect, in that other
337person; or
338 (b) is related to the other person because a third person, or a group of third persons who
339are affiliated persons with respect to each other, holds an ownership interest of more than 5%,
340whether direct or indirect, in the related persons.
341 (5) "Agreement" means the Streamlined Sales and Use Tax Agreement adopted on
342November 12, 2002, including amendments made to the Streamlined Sales and Use Tax
343Agreement after November 12, 2002.
344 (6) "Agreement combined tax rate" means the sum of the tax rates:
345 (a) listed under Subsection (7); and
346 (b) that are imposed within a local taxing jurisdiction.
347 (7) "Agreement sales and use tax" means a tax imposed under:
348 (a) Subsection 59-12-103(2)(a)(i)(A);
349 (b) Subsection 59-12-103(2)(b)(i);
350 [(c) Subsection 59-12-103(2)(c)(i);]
351 [(d)] (c) Subsection 59-12-103(2)(d);
352 [(e)] (d) Subsection 59-12-103(2)(e)(i)(A)(I);
353 [(f)] (e) Section 59-12-204;
354 [(g)] (f) Section 59-12-401;
355 [(h)] (g) Section 59-12-402;
356 [(i)] (h) Section 59-12-402.1;
357 [(j)] (i) Section 59-12-703;
358 [(k)] (j) Section 59-12-802;
359 [(l)] (k) Section 59-12-804;
360 [(m)] (l) Section 59-12-1102;
361 [(n)] (m) Section 59-12-1302;
362 [(o)] (n) Section 59-12-1402;
363 [(p)] (o) Section 59-12-1802;
364 [(q)] (p) Section 59-12-2003; 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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365 [(r)] (q) Section 59-12-2103;
366 [(s)] (r) Section 59-12-2213;
367 [(t)] (s) Section 59-12-2214;
368 [(u)] (t) Section 59-12-2215;
369 [(v)] (u) Section 59-12-2216;
370 [(w)] (v) Section 59-12-2217;
371 [(x)] (w) Section 59-12-2218;
372 [(y)] (x) Section 59-12-2219; or
373 [(z)] (y) Section 59-12-2220.
374 (8) "Aircraft" means the same as that term is defined in Section 72-10-102.
375 (9) "Aircraft maintenance, repair, and overhaul provider" means a business entity:
376 (a) except for:
377 (i) an airline as defined in Section 59-2-102; or
378 (ii) an affiliated group, as defined in Section 59-7-101, except that "affiliated group"
379includes a corporation that is qualified to do business but is not otherwise doing business in the
380state, of an airline; and
381 (b) that has the workers, expertise, and facilities to perform the following, regardless of
382whether the business entity performs the following in this state:
383 (i) check, diagnose, overhaul, and repair:
384 (A) an onboard system of a fixed wing turbine powered aircraft; and
385 (B) the parts that comprise an onboard system of a fixed wing turbine powered aircraft;
386 (ii) assemble, change, dismantle, inspect, and test a fixed wing turbine powered aircraft
387engine;
388 (iii) perform at least the following maintenance on a fixed wing turbine powered
389aircraft:
390 (A) an inspection;
391 (B) a repair, including a structural repair or modification;
392 (C) changing landing gear; and
393 (D) addressing issues related to an aging fixed wing turbine powered aircraft;
394 (iv) completely remove the existing paint of a fixed wing turbine powered aircraft and
395completely apply new paint to the fixed wing turbine powered aircraft; and 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
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396 (v) refurbish the interior of a fixed wing turbine powered aircraft in a manner that
397results in a change in the fixed wing turbine powered aircraft's certification requirements by the
398authority that certifies the fixed wing turbine powered aircraft.
399 (10) "Alcoholic beverage" means a beverage that:
400 (a) is suitable for human consumption; and
401 (b) contains .5% or more alcohol by volume.
402 (11) "Alternative energy" means:
403 (a) biomass energy;
404 (b) geothermal energy;
405 (c) hydroelectric energy;
406 (d) solar energy;
407 (e) wind energy; or
408 (f) energy that is derived from:
409 (i) coal-to-liquids;
410 (ii) nuclear fuel;
411 (iii) oil-impregnated diatomaceous earth;
412 (iv) oil sands;
413 (v) oil shale;
414 (vi) petroleum coke; or
415 (vii) waste heat from:
416 (A) an industrial facility; or
417 (B) a power station in which an electric generator is driven through a process in which
418water is heated, turns into steam, and spins a steam turbine.
419 (12) (a) Subject to Subsection (12)(b), "alternative energy electricity production
420facility" means a facility that:
421 (i) uses alternative energy to produce electricity; and
422 (ii) has a production capacity of two megawatts or greater.
423 (b) A facility is an alternative energy electricity production facility regardless of
424whether the facility is:
425 (i) connected to an electric grid; or
426 (ii) located on the premises of an electricity consumer. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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427 (13) (a) "Ancillary service" means a service associated with, or incidental to, the
428provision of telecommunications service.
429 (b) "Ancillary service" includes:
430 (i) a conference bridging service;
431 (ii) a detailed communications billing service;
432 (iii) directory assistance;
433 (iv) a vertical service; or
434 (v) a voice mail service.
435 (14) "Area agency on aging" means the same as that term is defined in Section
43662A-3-101.
437 (15) "Assisted amusement device" means an amusement device, skill device, or ride
438device that is started and stopped by an individual:
439 (a) who is not the purchaser or renter of the right to use or operate the amusement
440device, skill device, or ride device; and
441 (b) at the direction of the seller of the right to use the amusement device, skill device,
442or ride device.
443 (16) "Assisted cleaning or washing of tangible personal property" means cleaning or
444washing of tangible personal property if the cleaning or washing labor is primarily performed
445by an individual:
446 (a) who is not the purchaser of the cleaning or washing of the tangible personal
447property; and
448 (b) at the direction of the seller of the cleaning or washing of the tangible personal
449property.
450 (17) "Authorized carrier" means:
451 (a) in the case of vehicles operated over public highways, the holder of credentials
452indicating that the vehicle is or will be operated pursuant to both the International Registration
453Plan and the International Fuel Tax Agreement;
454 (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
455certificate or air carrier's operating certificate; or
456 (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
457stock, a person who uses locomotives, freight cars, railroad work equipment, or other rolling 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 16 -
458stock in more than one state.
459 (18) (a) Except as provided in Subsection (18)(b), "biomass energy" means any of the
460following that is used as the primary source of energy to produce fuel or electricity:
461 (i) material from a plant or tree; or
462 (ii) other organic matter that is available on a renewable basis, including:
463 (A) slash and brush from forests and woodlands;
464 (B) animal waste;
465 (C) waste vegetable oil;
466 (D) methane or synthetic gas produced at a landfill, as a byproduct of the treatment of
467wastewater residuals, or through the conversion of a waste material through a nonincineration,
468thermal conversion process;
469 (E) aquatic plants; and
470 (F) agricultural products.
471 (b) "Biomass energy" does not include:
472 (i) black liquor; or
473 (ii) treated woods.
474 (19) (a) "Bundled transaction" means the sale of two or more items of tangible personal
475property, products, or services if the tangible personal property, products, or services are:
476 (i) distinct and identifiable; and
477 (ii) sold for one nonitemized price.
478 (b) "Bundled transaction" does not include:
479 (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
480the basis of the selection by the purchaser of the items of tangible personal property included in
481the transaction;
482 (ii) the sale of real property;
483 (iii) the sale of services to real property;
484 (iv) the retail sale of tangible personal property and a service if:
485 (A) the tangible personal property:
486 (I) is essential to the use of the service; and
487 (II) is provided exclusively in connection with the service; and
488 (B) the service is the true object of the transaction; 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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489 (v) the retail sale of two services if:
490 (A) one service is provided that is essential to the use or receipt of a second service;
491 (B) the first service is provided exclusively in connection with the second service; and
492 (C) the second service is the true object of the transaction;
493 (vi) a transaction that includes tangible personal property or a product subject to
494taxation under this chapter and tangible personal property or a product that is not subject to
495taxation under this chapter if the:
496 (A) seller's purchase price of the tangible personal property or product subject to
497taxation under this chapter is de minimis; or
498 (B) seller's sales price of the tangible personal property or product subject to taxation
499under this chapter is de minimis; and
500 (vii) the retail sale of tangible personal property that is not subject to taxation under
501this chapter and tangible personal property that is subject to taxation under this chapter if:
502 (A) that retail sale includes:
503 (I) food and food ingredients;
504 (II) a drug;
505 (III) durable medical equipment;
506 (IV) mobility enhancing equipment;
507 (V) an over-the-counter drug;
508 (VI) a prosthetic device; or
509 (VII) a medical supply; and
510 (B) subject to Subsection (19)(f):
511 (I) the seller's purchase price of the tangible personal property subject to taxation under
512this chapter is 50% or less of the seller's total purchase price of that retail sale; or
513 (II) the seller's sales price of the tangible personal property subject to taxation under
514this chapter is 50% or less of the seller's total sales price of that retail sale.
515 (c) (i) For purposes of Subsection (19)(a)(i), tangible personal property, a product, or a
516service that is distinct and identifiable does not include:
517 (A) packaging that:
518 (I) accompanies the sale of the tangible personal property, product, or service; and
519 (II) is incidental or immaterial to the sale of the tangible personal property, product, or 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
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520service;
521 (B) tangible personal property, a product, or a service provided free of charge with the
522purchase of another item of tangible personal property, a product, or a service; or
523 (C) an item of tangible personal property, a product, or a service included in the
524definition of "purchase price."
525 (ii) For purposes of Subsection (19)(c)(i)(B), an item of tangible personal property, a
526product, or a service is provided free of charge with the purchase of another item of tangible
527personal property, a product, or a service if the sales price of the purchased item of tangible
528personal property, product, or service does not vary depending on the inclusion of the tangible
529personal property, product, or service provided free of charge.
530 (d) (i) For purposes of Subsection (19)(a)(ii), property sold for one nonitemized price
531does not include a price that is separately identified by tangible personal property, product, or
532service on the following, regardless of whether the following is in paper format or electronic
533format:
534 (A) a binding sales document; or
535 (B) another supporting sales-related document that is available to a purchaser.
536 (ii) For purposes of Subsection (19)(d)(i), a binding sales document or another
537supporting sales-related document that is available to a purchaser includes:
538 (A) a bill of sale;
539 (B) a contract;
540 (C) an invoice;
541 (D) a lease agreement;
542 (E) a periodic notice of rates and services;
543 (F) a price list;
544 (G) a rate card;
545 (H) a receipt; or
546 (I) a service agreement.
547 (e) (i) For purposes of Subsection (19)(b)(vi), the sales price of tangible personal
548property or a product subject to taxation under this chapter is de minimis if:
549 (A) the seller's purchase price of the tangible personal property or product is 10% or
550less of the seller's total purchase price of the bundled transaction; or 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 19 -
551 (B) the seller's sales price of the tangible personal property or product is 10% or less of
552the seller's total sales price of the bundled transaction.
553 (ii) For purposes of Subsection (19)(b)(vi), a seller:
554 (A) shall use the seller's purchase price or the seller's sales price to determine if the
555purchase price or sales price of the tangible personal property or product subject to taxation
556under this chapter is de minimis; and
557 (B) may not use a combination of the seller's purchase price and the seller's sales price
558to determine if the purchase price or sales price of the tangible personal property or product
559subject to taxation under this chapter is de minimis.
560 (iii) For purposes of Subsection (19)(b)(vi), a seller shall use the full term of a service
561contract to determine if the sales price of tangible personal property or a product is de minimis.
562 (f) For purposes of Subsection (19)(b)(vii)(B), a seller may not use a combination of
563the seller's purchase price and the seller's sales price to determine if tangible personal property
564subject to taxation under this chapter is 50% or less of the seller's total purchase price or sales
565price of that retail sale.
566 (20) "Certified automated system" means software certified by the governing board of
567the agreement that:
568 (a) calculates the agreement sales and use tax imposed within a local taxing
569jurisdiction:
570 (i) on a transaction; and
571 (ii) in the states that are members of the agreement;
572 (b) determines the amount of agreement sales and use tax to remit to a state that is a
573member of the agreement; and
574 (c) maintains a record of the transaction described in Subsection (20)(a)(i).
575 (21) "Certified service provider" means an agent certified:
576 (a) by the governing board of the agreement; and
577 (b) to perform a seller's sales and use tax functions for an agreement sales and use tax,
578as outlined in the contract between the governing board of the agreement and the certified
579service provider, other than the seller's obligation under Section 59-12-124 to remit a tax on the
580seller's own purchases.
581 (22) (a) Subject to Subsection (22)(b), "clothing" means all human wearing apparel 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 20 -
582suitable for general use.
583 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
584commission shall make rules:
585 (i) listing the items that constitute "clothing"; and
586 (ii) that are consistent with the list of items that constitute "clothing" under the
587agreement.
588 (23) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
589 (24) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
590fuels that does not constitute industrial use under Subsection (57) or residential use under
591Subsection (112).
592 (25) (a) "Common carrier" means a person engaged in or transacting the business of
593transporting passengers, freight, merchandise, or other property for hire within this state.
594 (b) (i) "Common carrier" does not include a person that, at the time the person is
595traveling to or from that person's place of employment, transports a passenger to or from the
596passenger's place of employment.
597 (ii) For purposes of Subsection (25)(b)(i), in accordance with Title 63G, Chapter 3,
598Utah Administrative Rulemaking Act, the commission may make rules defining what
599constitutes a person's place of employment.
600 (c) "Common carrier" does not include a person that provides transportation network
601services, as defined in Section 13-51-102.
602 (26) "Component part" includes:
603 (a) poultry, dairy, and other livestock feed, and their components;
604 (b) baling ties and twine used in the baling of hay and straw;
605 (c) fuel used for providing temperature control of orchards and commercial
606greenhouses doing a majority of their business in wholesale sales, and for providing power for
607off-highway type farm machinery; and
608 (d) feed, seeds, and seedlings.
609 (27) "Computer" means an electronic device that accepts information:
610 (a) (i) in digital form; or
611 (ii) in a form similar to digital form; and
612 (b) manipulates that information for a result based on a sequence of instructions. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 21 -
613 (28) "Computer software" means a set of coded instructions designed to cause:
614 (a) a computer to perform a task; or
615 (b) automatic data processing equipment to perform a task.
616 (29) "Computer software maintenance contract" means a contract that obligates a seller
617of computer software to provide a customer with:
618 (a) future updates or upgrades to computer software;
619 (b) support services with respect to computer software; or
620 (c) a combination of Subsections (29)(a) and (b).
621 (30) (a) "Conference bridging service" means an ancillary service that links two or
622more participants of an audio conference call or video conference call.
623 (b) "Conference bridging service" may include providing a telephone number as part of
624the ancillary service described in Subsection (30)(a).
625 (c) "Conference bridging service" does not include a telecommunications service used
626to reach the ancillary service described in Subsection (30)(a).
627 (31) "Construction materials" means any tangible personal property that will be
628converted into real property.
629 (32) "Delivered electronically" means delivered to a purchaser by means other than
630tangible storage media.
631 (33) (a) "Delivery charge" means a charge:
632 (i) by a seller of:
633 (A) tangible personal property;
634 (B) a product transferred electronically; or
635 (C) a service; and
636 (ii) for preparation and delivery of the tangible personal property, product transferred
637electronically, or services described in Subsection (33)(a)(i) to a location designated by the
638purchaser.
639 (b) "Delivery charge" includes a charge for the following:
640 (i) transportation;
641 (ii) shipping;
642 (iii) postage;
643 (iv) handling; 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 22 -
644 (v) crating; or
645 (vi) packing.
646 (34) "Detailed telecommunications billing service" means an ancillary service of
647separately stating information pertaining to individual calls on a customer's billing statement.
648 (35) "Dietary supplement" means a product, other than tobacco, that:
649 (a) is intended to supplement the diet;
650 (b) contains one or more of the following dietary ingredients:
651 (i) a vitamin;
652 (ii) a mineral;
653 (iii) an herb or other botanical;
654 (iv) an amino acid;
655 (v) a dietary substance for use by humans to supplement the diet by increasing the total
656dietary intake; or
657 (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
658described in Subsections (35)(b)(i) through (v);
659 (c) (i) except as provided in Subsection (35)(c)(ii), is intended for ingestion in:
660 (A) tablet form;
661 (B) capsule form;
662 (C) powder form;
663 (D) softgel form;
664 (E) gelcap form; or
665 (F) liquid form; or
666 (ii) if the product is not intended for ingestion in a form described in Subsections
667(35)(c)(i)(A) through (F), is not represented:
668 (A) as conventional food; and
669 (B) for use as a sole item of:
670 (I) a meal; or
671 (II) the diet; and
672 (d) is required to be labeled as a dietary supplement:
673 (i) identifiable by the "Supplemental Facts" box found on the label; and
674 (ii) as required by 21 C.F.R. Sec. 101.36. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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675 (36) (a) "Digital audio work" means a work that results from the fixation of a series of
676musical, spoken, or other sounds.
677 (b) "Digital audio work" includes a ringtone.
678 (37) "Digital audio-visual work" means a series of related images which, when shown
679in succession, imparts an impression of motion, together with accompanying sounds, if any.
680 (38) "Digital book" means a work that is generally recognized in the ordinary and usual
681sense as a book.
682 (39) (a) "Direct mail" means printed material delivered or distributed by United States
683mail or other delivery service:
684 (i) to:
685 (A) a mass audience; or
686 (B) addressees on a mailing list provided:
687 (I) by a purchaser of the mailing list; or
688 (II) at the discretion of the purchaser of the mailing list; and
689 (ii) if the cost of the printed material is not billed directly to the recipients.
690 (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
691purchaser to a seller of direct mail for inclusion in a package containing the printed material.
692 (c) "Direct mail" does not include multiple items of printed material delivered to a
693single address.
694 (40) "Directory assistance" means an ancillary service of providing:
695 (a) address information; or
696 (b) telephone number information.
697 (41) (a) "Disposable home medical equipment or supplies" means medical equipment
698or supplies that:
699 (i) cannot withstand repeated use; and
700 (ii) are purchased by, for, or on behalf of a person other than:
701 (A) a health care facility as defined in Section 26-21-2;
702 (B) a health care provider as defined in Section 78B-3-403;
703 (C) an office of a health care provider described in Subsection (41)(a)(ii)(B); or
704 (D) a person similar to a person described in Subsections (41)(a)(ii)(A) through (C).
705 (b) "Disposable home medical equipment or supplies" does not include: 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 24 -
706 (i) a drug;
707 (ii) durable medical equipment;
708 (iii) a hearing aid;
709 (iv) a hearing aid accessory;
710 (v) mobility enhancing equipment; or
711 (vi) tangible personal property used to correct impaired vision, including:
712 (A) eyeglasses; or
713 (B) contact lenses.
714 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
715commission may by rule define what constitutes medical equipment or supplies.
716 (42) "Drilling equipment manufacturer" means a facility:
717 (a) located in the state;
718 (b) with respect to which 51% or more of the manufacturing activities of the facility
719consist of manufacturing component parts of drilling equipment;
720 (c) that uses pressure of 800,000 or more pounds per square inch as part of the
721manufacturing process; and
722 (d) that uses a temperature of 2,000 or more degrees Fahrenheit as part of the
723manufacturing process.
724 (43) (a) "Drug" means a compound, substance, or preparation, or a component of a
725compound, substance, or preparation that is:
726 (i) recognized in:
727 (A) the official United States Pharmacopoeia;
728 (B) the official Homeopathic Pharmacopoeia of the United States;
729 (C) the official National Formulary; or
730 (D) a supplement to a publication listed in Subsections (43)(a)(i)(A) through (C);
731 (ii) intended for use in the:
732 (A) diagnosis of disease;
733 (B) cure of disease;
734 (C) mitigation of disease;
735 (D) treatment of disease; or
736 (E) prevention of disease; or 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 25 -
737 (iii) intended to affect:
738 (A) the structure of the body; or
739 (B) any function of the body.
740 (b) "Drug" does not include:
741 (i) food and food ingredients;
742 (ii) a dietary supplement;
743 (iii) an alcoholic beverage; or
744 (iv) a prosthetic device.
745 (44) (a) Except as provided in Subsection (44)(c), "durable medical equipment" means
746equipment that:
747 (i) can withstand repeated use;
748 (ii) is primarily and customarily used to serve a medical purpose;
749 (iii) generally is not useful to a person in the absence of illness or injury; and
750 (iv) is not worn in or on the body.
751 (b) "Durable medical equipment" includes parts used in the repair or replacement of the
752equipment described in Subsection (44)(a).
753 (c) "Durable medical equipment" does not include mobility enhancing equipment.
754 (45) "Electronic" means:
755 (a) relating to technology; and
756 (b) having:
757 (i) electrical capabilities;
758 (ii) digital capabilities;
759 (iii) magnetic capabilities;
760 (iv) wireless capabilities;
761 (v) optical capabilities;
762 (vi) electromagnetic capabilities; or
763 (vii) capabilities similar to Subsections (45)(b)(i) through (vi).
764 (46) "Electronic financial payment service" means an establishment:
765 (a) within NAICS Code 522320, Financial Transactions Processing, Reserve, and
766Clearinghouse Activities, of the 2012 North American Industry Classification System of the
767federal Executive Office of the President, Office of Management and Budget; and 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 26 -
768 (b) that performs electronic financial payment services.
769 (47) "Employee" means the same as that term is defined in Section 59-10-401.
770 (48) "Fixed guideway" means a public transit facility that uses and occupies:
771 (a) rail for the use of public transit; or
772 (b) a separate right-of-way for the use of public transit.
773 (49) "Fixed wing turbine powered aircraft" means an aircraft that:
774 (a) is powered by turbine engines;
775 (b) operates on jet fuel; and
776 (c) has wings that are permanently attached to the fuselage of the aircraft.
777 (50) "Fixed wireless service" means a telecommunications service that provides radio
778communication between fixed points.
779 (51) (a) "Food and food ingredients" means substances:
780 (i) regardless of whether the substances are in:
781 (A) liquid form;
782 (B) concentrated form;
783 (C) solid form;
784 (D) frozen form;
785 (E) dried form; or
786 (F) dehydrated form; and
787 (ii) that are:
788 (A) sold for:
789 (I) ingestion by humans; or
790 (II) chewing by humans; and
791 (B) consumed for the substance's:
792 (I) taste; or
793 (II) nutritional value.
794 (b) "Food and food ingredients" includes an item described in Subsection (96)(b)(iii).
795 (c) "Food and food ingredients" does not include:
796 (i) an alcoholic beverage;
797 (ii) tobacco; or
798 (iii) prepared food. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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799 (52) (a) "Fundraising sales" means sales:
800 (i) (A) made by a school; or
801 (B) made by a school student;
802 (ii) that are for the purpose of raising funds for the school to purchase equipment,
803materials, or provide transportation; and
804 (iii) that are part of an officially sanctioned school activity.
805 (b) For purposes of Subsection (52)(a)(iii), "officially sanctioned school activity"
806means a school activity:
807 (i) that is conducted in accordance with a formal policy adopted by the school or school
808district governing the authorization and supervision of fundraising activities;
809 (ii) that does not directly or indirectly compensate an individual teacher or other
810educational personnel by direct payment, commissions, or payment in kind; and
811 (iii) the net or gross revenues from which are deposited in a dedicated account
812controlled by the school or school district.
813 (53) "Geothermal energy" means energy contained in heat that continuously flows
814outward from the earth that is used as the sole source of energy to produce electricity.
815 (54) "Governing board of the agreement" means the governing board of the agreement
816that is:
817 (a) authorized to administer the agreement; and
818 (b) established in accordance with the agreement.
819 (55) (a) For purposes of Subsection 59-12-104(41), "governmental entity" means:
820 (i) the executive branch of the state, including all departments, institutions, boards,
821divisions, bureaus, offices, commissions, and committees;
822 (ii) the judicial branch of the state, including the courts, the Judicial Council, the
823Administrative Office of the Courts, and similar administrative units in the judicial branch;
824 (iii) the legislative branch of the state, including the House of Representatives, the
825Senate, the Legislative Printing Office, the Office of Legislative Research and General
826Counsel, the Office of the Legislative Auditor General, and the Office of the Legislative Fiscal
827Analyst;
828 (iv) the National Guard;
829 (v) an independent entity as defined in Section 63E-1-102; or 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 28 -
830 (vi) a political subdivision as defined in Section 17B-1-102.
831 (b) "Governmental entity" does not include the state systems of public and higher
832education, including:
833 (i) a school;
834 (ii) the State Board of Education;
835 (iii) the Utah Board of Higher Education; or
836 (iv) an institution of higher education described in Section 53B-1-102.
837 (56) "Hydroelectric energy" means water used as the sole source of energy to produce
838electricity.
839 (57) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
840other fuels:
841 (a) in mining or extraction of minerals;
842 (b) in agricultural operations to produce an agricultural product up to the time of
843harvest or placing the agricultural product into a storage facility, including:
844 (i) commercial greenhouses;
845 (ii) irrigation pumps;
846 (iii) farm machinery;
847 (iv) implements of husbandry as defined in Section 41-1a-102 that are not registered
848under Title 41, Chapter 1a, Part 2, Registration; and
849 (v) other farming activities;
850 (c) in manufacturing tangible personal property at an establishment described in:
851 (i) SIC Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of
852the federal Executive Office of the President, Office of Management and Budget; or
853 (ii) a NAICS code within NAICS Sector 31-33, Manufacturing, of the 2017 North
854American Industry Classification System of the federal Executive Office of the President,
855Office of Management and Budget;
856 (d) by a scrap recycler if:
857 (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
858one or more of the following items into prepared grades of processed materials for use in new
859products:
860 (A) iron; 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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861 (B) steel;
862 (C) nonferrous metal;
863 (D) paper;
864 (E) glass;
865 (F) plastic;
866 (G) textile; or
867 (H) rubber; and
868 (ii) the new products under Subsection (57)(d)(i) would otherwise be made with
869nonrecycled materials; or
870 (e) in producing a form of energy or steam described in Subsection 54-2-1(3)(a) by a
871cogeneration facility as defined in Section 54-2-1.
872 (58) (a) Except as provided in Subsection (58)(b), "installation charge" means a charge
873for installing:
874 (i) tangible personal property; or
875 (ii) a product transferred electronically.
876 (b) "Installation charge" does not include a charge for:
877 (i) repairs or renovations of:
878 (A) tangible personal property; or
879 (B) a product transferred electronically; or
880 (ii) attaching tangible personal property or a product transferred electronically:
881 (A) to other tangible personal property; and
882 (B) as part of a manufacturing or fabrication process.
883 (59) "Institution of higher education" means an institution of higher education listed in
884Section 53B-2-101.
885 (60) (a) "Lease" or "rental" means a transfer of possession or control of tangible
886personal property or a product transferred electronically for:
887 (i) (A) a fixed term; or
888 (B) an indeterminate term; and
889 (ii) consideration.
890 (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
891amount of consideration may be increased or decreased by reference to the amount realized 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 30 -
892upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
893Code.
894 (c) "Lease" or "rental" does not include:
895 (i) a transfer of possession or control of property under a security agreement or
896deferred payment plan that requires the transfer of title upon completion of the required
897payments;
898 (ii) a transfer of possession or control of property under an agreement that requires the
899transfer of title:
900 (A) upon completion of required payments; and
901 (B) if the payment of an option price does not exceed the greater of:
902 (I) $100; or
903 (II) 1% of the total required payments; or
904 (iii) providing tangible personal property along with an operator for a fixed period of
905time or an indeterminate period of time if the operator is necessary for equipment to perform as
906designed.
907 (d) For purposes of Subsection (60)(c)(iii), an operator is necessary for equipment to
908perform as designed if the operator's duties exceed the:
909 (i) set-up of tangible personal property;
910 (ii) maintenance of tangible personal property; or
911 (iii) inspection of tangible personal property.
912 (61) "Lesson" means a fixed period of time for the duration of which a trained
913instructor:
914 (a) is present with a student in person or by video; and
915 (b) actively instructs the student, including by providing observation or feedback.
916 (62) "Life science establishment" means an establishment in this state that is classified
917under the following NAICS codes of the 2007 North American Industry Classification System
918of the federal Executive Office of the President, Office of Management and Budget:
919 (a) NAICS Code 33911, Medical Equipment and Supplies Manufacturing;
920 (b) NAICS Code 334510, Electromedical and Electrotherapeutic Apparatus
921Manufacturing; or
922 (c) NAICS Code 334517, Irradiation Apparatus Manufacturing. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 31 -
923 (63) "Life science research and development facility" means a facility owned, leased,
924or rented by a life science establishment if research and development is performed in 51% or
925more of the total area of the facility.
926 (64) "Load and leave" means delivery to a purchaser by use of a tangible storage media
927if the tangible storage media is not physically transferred to the purchaser.
928 (65) "Local taxing jurisdiction" means a:
929 (a) county that is authorized to impose an agreement sales and use tax;
930 (b) city that is authorized to impose an agreement sales and use tax; or
931 (c) town that is authorized to impose an agreement sales and use tax.
932 (66) "Manufactured home" means the same as that term is defined in Section
93315A-1-302.
934 (67) "Manufacturing facility" means:
935 (a) an establishment described in:
936 (i) SIC Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of
937the federal Executive Office of the President, Office of Management and Budget; or
938 (ii) a NAICS code within NAICS Sector 31-33, Manufacturing, of the 2017 North
939American Industry Classification System of the federal Executive Office of the President,
940Office of Management and Budget;
941 (b) a scrap recycler if:
942 (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
943one or more of the following items into prepared grades of processed materials for use in new
944products:
945 (A) iron;
946 (B) steel;
947 (C) nonferrous metal;
948 (D) paper;
949 (E) glass;
950 (F) plastic;
951 (G) textile; or
952 (H) rubber; and
953 (ii) the new products under Subsection (67)(b)(i) would otherwise be made with 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 32 -
954nonrecycled materials; or
955 (c) a cogeneration facility as defined in Section 54-2-1 if the cogeneration facility is
956placed in service on or after May 1, 2006.
957 (68) (a) "Marketplace" means a physical or electronic place, platform, or forum where
958tangible personal property, a product transferred electronically, or a service is offered for sale.
959 (b) "Marketplace" includes a store, a booth, an Internet website, a catalog, or a
960dedicated sales software application.
961 (69) (a) "Marketplace facilitator" means a person, including an affiliate of the person,
962that enters into a contract, an agreement, or otherwise with sellers, for consideration, to
963facilitate the sale of a seller's product through a marketplace that the person owns, operates, or
964controls and that directly or indirectly:
965 (i) does any of the following:
966 (A) lists, makes available, or advertises tangible personal property, a product
967transferred electronically, or a service for sale by a marketplace seller on a marketplace that the
968person owns, operates, or controls;
969 (B) facilitates the sale of a marketplace seller's tangible personal property, product
970transferred electronically, or service by transmitting or otherwise communicating an offer or
971acceptance of a retail sale between the marketplace seller and a purchaser using the
972marketplace;
973 (C) owns, rents, licenses, makes available, or operates any electronic or physical
974infrastructure or any property, process, method, copyright, trademark, or patent that connects a
975marketplace seller to a purchaser for the purpose of making a retail sale of tangible personal
976property, a product transferred electronically, or a service;
977 (D) provides a marketplace for making, or otherwise facilitates, a retail sale of tangible
978personal property, a product transferred electronically, or a service, regardless of ownership or
979control of the tangible personal property, the product transferred electronically, or the service
980that is the subject of the retail sale;
981 (E) provides software development or research and development activities related to
982any activity described in this Subsection (69)(a)(i), if the software development or research and
983development activity is directly related to the person's marketplace;
984 (F) provides or offers fulfillment or storage services for a marketplace seller; 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 33 -
985 (G) sets prices for the sale of tangible personal property, a product transferred
986electronically, or a service by a marketplace seller;
987 (H) provides or offers customer service to a marketplace seller or a marketplace seller's
988purchaser or accepts or assists with taking orders, returns, or exchanges of tangible personal
989property, a product transferred electronically, or a service sold by a marketplace seller on the
990person's marketplace; or
991 (I) brands or otherwise identifies sales as those of the person; and
992 (ii) does any of the following:
993 (A) collects the sales price or purchase price of a retail sale of tangible personal
994property, a product transferred electronically, or a service;
995 (B) provides payment processing services for a retail sale of tangible personal property,
996a product transferred electronically, or a service;
997 (C) charges, collects, or otherwise receives a selling fee, listing fee, referral fee, closing
998fee, a fee for inserting or making available tangible personal property, a product transferred
999electronically, or a service on the person's marketplace, or other consideration for the
1000facilitation of a retail sale of tangible personal property, a product transferred electronically, or
1001a service, regardless of ownership or control of the tangible personal property, the product
1002transferred electronically, or the service that is the subject of the retail sale;
1003 (D) through terms and conditions, an agreement, or another arrangement with a third
1004person, collects payment from a purchase for a retail sale of tangible personal property, a
1005product transferred electronically, or a service and transmits that payment to the marketplace
1006seller, regardless of whether the third person receives compensation or other consideration in
1007exchange for the service; or
1008 (E) provides a virtual currency for a purchaser to use to purchase tangible personal
1009property, a product transferred electronically, or service offered for sale.
1010 (b) "Marketplace facilitator" does not include:
1011 (i) a person that only provides payment processing services; or
1012 (ii) a person described in Subsection (69)(a) to the extent the person is facilitating a
1013sale for a seller that is a restaurant as defined in Section 59-12-602.
1014 (70) "Marketplace seller" means a seller that makes one or more retail sales through a
1015marketplace that a marketplace facilitator owns, operates, or controls, regardless of whether the 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 34 -
1016seller is required to be registered to collect and remit the tax under this part.
1017 (71) "Member of the immediate family of the producer" means a person who is related
1018to a producer described in Subsection 59-12-104(20)(a) as a:
1019 (a) child or stepchild, regardless of whether the child or stepchild is:
1020 (i) an adopted child or adopted stepchild; or
1021 (ii) a foster child or foster stepchild;
1022 (b) grandchild or stepgrandchild;
1023 (c) grandparent or stepgrandparent;
1024 (d) nephew or stepnephew;
1025 (e) niece or stepniece;
1026 (f) parent or stepparent;
1027 (g) sibling or stepsibling;
1028 (h) spouse;
1029 (i) person who is the spouse of a person described in Subsections (71)(a) through (g);
1030or
1031 (j) person similar to a person described in Subsections (71)(a) through (i) as
1032determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
1033Administrative Rulemaking Act.
1034 (72) "Mobile home" means the same as that term is defined in Section 15A-1-302.
1035 (73) "Mobile telecommunications service" means the same as that term is defined in
1036the Mobile Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
1037 (74) (a) "Mobile wireless service" means a telecommunications service, regardless of
1038the technology used, if:
1039 (i) the origination point of the conveyance, routing, or transmission is not fixed;
1040 (ii) the termination point of the conveyance, routing, or transmission is not fixed; or
1041 (iii) the origination point described in Subsection (74)(a)(i) and the termination point
1042described in Subsection (74)(a)(ii) are not fixed.
1043 (b) "Mobile wireless service" includes a telecommunications service that is provided
1044by a commercial mobile radio service provider.
1045 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1046commission may by rule define "commercial mobile radio service provider." 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 35 -
1047 (75) (a) Except as provided in Subsection (75)(c), "mobility enhancing equipment"
1048means equipment that is:
1049 (i) primarily and customarily used to provide or increase the ability to move from one
1050place to another;
1051 (ii) appropriate for use in a:
1052 (A) home; or
1053 (B) motor vehicle; and
1054 (iii) not generally used by persons with normal mobility.
1055 (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
1056the equipment described in Subsection (75)(a).
1057 (c) "Mobility enhancing equipment" does not include:
1058 (i) a motor vehicle;
1059 (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
1060vehicle manufacturer;
1061 (iii) durable medical equipment; or
1062 (iv) a prosthetic device.
1063 (76) "Model 1 seller" means a seller registered under the agreement that has selected a
1064certified service provider as the seller's agent to perform the seller's sales and use tax functions
1065for agreement sales and use taxes, as outlined in the contract between the governing board of
1066the agreement and the certified service provider, other than the seller's obligation under Section
106759-12-124 to remit a tax on the seller's own purchases.
1068 (77) "Model 2 seller" means a seller registered under the agreement that:
1069 (a) except as provided in Subsection (77)(b), has selected a certified automated system
1070to perform the seller's sales tax functions for agreement sales and use taxes; and
1071 (b) retains responsibility for remitting all of the sales tax:
1072 (i) collected by the seller; and
1073 (ii) to the appropriate local taxing jurisdiction.
1074 (78) (a) Subject to Subsection (78)(b), "model 3 seller" means a seller registered under
1075the agreement that has:
1076 (i) sales in at least five states that are members of the agreement;
1077 (ii) total annual sales revenues of at least $500,000,000; 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 36 -
1078 (iii) a proprietary system that calculates the amount of tax:
1079 (A) for an agreement sales and use tax; and
1080 (B) due to each local taxing jurisdiction; and
1081 (iv) entered into a performance agreement with the governing board of the agreement.
1082 (b) For purposes of Subsection (78)(a), "model 3 seller" includes an affiliated group of
1083sellers using the same proprietary system.
1084 (79) "Model 4 seller" means a seller that is registered under the agreement and is not a
1085model 1 seller, model 2 seller, or model 3 seller.
1086 (80) "Modular home" means a modular unit as defined in Section 15A-1-302.
1087 (81) "Motor vehicle" means the same as that term is defined in Section 41-1a-102.
1088 (82) "Oil sands" means impregnated bituminous sands that:
1089 (a) contain a heavy, thick form of petroleum that is released when heated, mixed with
1090other hydrocarbons, or otherwise treated;
1091 (b) yield mixtures of liquid hydrocarbon; and
1092 (c) require further processing other than mechanical blending before becoming finished
1093petroleum products.
1094 (83) "Oil shale" means a group of fine black to dark brown shales containing kerogen
1095material that yields petroleum upon heating and distillation.
1096 (84) "Optional computer software maintenance contract" means a computer software
1097maintenance contract that a customer is not obligated to purchase as a condition to the retail
1098sale of computer software.
1099 (85) (a) "Other fuels" means products that burn independently to produce heat or
1100energy.
1101 (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
1102personal property.
1103 (86) (a) "Paging service" means a telecommunications service that provides
1104transmission of a coded radio signal for the purpose of activating a specific pager.
1105 (b) For purposes of Subsection (86)(a), the transmission of a coded radio signal
1106includes a transmission by message or sound.
1107 (87) "Pawn transaction" means the same as that term is defined in Section 13-32a-102.
1108 (88) "Pawnbroker" means the same as that term is defined in Section 13-32a-102. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 37 -
1109 (89) (a) "Permanently attached to real property" means that for tangible personal
1110property attached to real property:
1111 (i) the attachment of the tangible personal property to the real property:
1112 (A) is essential to the use of the tangible personal property; and
1113 (B) suggests that the tangible personal property will remain attached to the real
1114property in the same place over the useful life of the tangible personal property; or
1115 (ii) if the tangible personal property is detached from the real property, the detachment
1116would:
1117 (A) cause substantial damage to the tangible personal property; or
1118 (B) require substantial alteration or repair of the real property to which the tangible
1119personal property is attached.
1120 (b) "Permanently attached to real property" includes:
1121 (i) the attachment of an accessory to the tangible personal property if the accessory is:
1122 (A) essential to the operation of the tangible personal property; and
1123 (B) attached only to facilitate the operation of the tangible personal property;
1124 (ii) a temporary detachment of tangible personal property from real property for a
1125repair or renovation if the repair or renovation is performed where the tangible personal
1126property and real property are located; or
1127 (iii) property attached to oil, gas, or water pipelines, except for the property listed in
1128Subsection (89)(c)(iii) or (iv).
1129 (c) "Permanently attached to real property" does not include:
1130 (i) the attachment of portable or movable tangible personal property to real property if
1131that portable or movable tangible personal property is attached to real property only for:
1132 (A) convenience;
1133 (B) stability; or
1134 (C) for an obvious temporary purpose;
1135 (ii) the detachment of tangible personal property from real property except for the
1136detachment described in Subsection (89)(b)(ii);
1137 (iii) an attachment of the following tangible personal property to real property if the
1138attachment to real property is only through a line that supplies water, electricity, gas,
1139telecommunications, cable, or supplies a similar item as determined by the commission by rule 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 38 -
1140made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
1141 (A) a computer;
1142 (B) a telephone;
1143 (C) a television; or
1144 (D) tangible personal property similar to Subsections (89)(c)(iii)(A) through (C) as
1145determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
1146Administrative Rulemaking Act; or
1147 (iv) an item listed in Subsection (130)(c).
1148 (90) "Person" includes any individual, firm, partnership, joint venture, association,
1149corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
1150municipality, district, or other local governmental entity of the state, or any group or
1151combination acting as a unit.
1152 (91) "Place of primary use":
1153 (a) for telecommunications service other than mobile telecommunications service,
1154means the street address representative of where the customer's use of the telecommunications
1155service primarily occurs, which shall be:
1156 (i) the residential street address of the customer; or
1157 (ii) the primary business street address of the customer; or
1158 (b) for mobile telecommunications service, means the same as that term is defined in
1159the Mobile Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
1160 (92) (a) "Postpaid calling service" means a telecommunications service a person
1161obtains by making a payment on a call-by-call basis:
1162 (i) through the use of a:
1163 (A) bank card;
1164 (B) credit card;
1165 (C) debit card; or
1166 (D) travel card; or
1167 (ii) by a charge made to a telephone number that is not associated with the origination
1168or termination of the telecommunications service.
1169 (b) "Postpaid calling service" includes a service, except for a prepaid wireless calling
1170service, that would be a prepaid wireless calling service if the service were exclusively a 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 39 -
1171telecommunications service.
1172 (93) "Postproduction" means an activity related to the finishing or duplication of a
1173medium described in Subsection 59-12-104(54)(a).
1174 (94) "Prepaid calling service" means a telecommunications service:
1175 (a) that allows a purchaser access to telecommunications service that is exclusively
1176telecommunications service;
1177 (b) that:
1178 (i) is paid for in advance; and
1179 (ii) enables the origination of a call using an:
1180 (A) access number; or
1181 (B) authorization code;
1182 (c) that is dialed:
1183 (i) manually; or
1184 (ii) electronically; and
1185 (d) sold in predetermined units or dollars that decline:
1186 (i) by a known amount; and
1187 (ii) with use.
1188 (95) "Prepaid wireless calling service" means a telecommunications service:
1189 (a) that provides the right to utilize:
1190 (i) mobile wireless service; and
1191 (ii) other service that is not a telecommunications service, including:
1192 (A) the download of a product transferred electronically;
1193 (B) a content service; or
1194 (C) an ancillary service;
1195 (b) that:
1196 (i) is paid for in advance; and
1197 (ii) enables the origination of a call using an:
1198 (A) access number; or
1199 (B) authorization code;
1200 (c) that is dialed:
1201 (i) manually; or 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 40 -
1202 (ii) electronically; and
1203 (d) sold in predetermined units or dollars that decline:
1204 (i) by a known amount; and
1205 (ii) with use.
1206 (96) (a) "Prepared food" means:
1207 (i) food:
1208 (A) sold in a heated state; or
1209 (B) heated by a seller;
1210 (ii) two or more food ingredients mixed or combined by the seller for sale as a single
1211item; or
1212 (iii) except as provided in Subsection (96)(c), food sold with an eating utensil provided
1213by the seller, including a:
1214 (A) plate;
1215 (B) knife;
1216 (C) fork;
1217 (D) spoon;
1218 (E) glass;
1219 (F) cup;
1220 (G) napkin; or
1221 (H) straw.
1222 (b) "Prepared food" does not include:
1223 (i) food that a seller only:
1224 (A) cuts;
1225 (B) repackages; or
1226 (C) pasteurizes; or
1227 (ii) (A) the following:
1228 (I) raw egg;
1229 (II) raw fish;
1230 (III) raw meat;
1231 (IV) raw poultry; or
1232 (V) a food containing an item described in Subsections (96)(b)(ii)(A)(I) through (IV); 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 41 -
1233and
1234 (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
1235Food and Drug Administration's Food Code that a consumer cook the items described in
1236Subsection (96)(b)(ii)(A) to prevent food borne illness; or
1237 (iii) the following if sold without eating utensils provided by the seller:
1238 (A) food and food ingredients sold by a seller if the seller's proper primary
1239classification under the 2002 North American Industry Classification System of the federal
1240Executive Office of the President, Office of Management and Budget, is manufacturing in
1241Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
1242Manufacturing;
1243 (B) food and food ingredients sold in an unheated state:
1244 (I) by weight or volume; and
1245 (II) as a single item; or
1246 (C) a bakery item, including:
1247 (I) a bagel;
1248 (II) a bar;
1249 (III) a biscuit;
1250 (IV) bread;
1251 (V) a bun;
1252 (VI) a cake;
1253 (VII) a cookie;
1254 (VIII) a croissant;
1255 (IX) a danish;
1256 (X) a donut;
1257 (XI) a muffin;
1258 (XII) a pastry;
1259 (XIII) a pie;
1260 (XIV) a roll;
1261 (XV) a tart;
1262 (XVI) a torte; or
1263 (XVII) a tortilla. 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 42 -
1264 (c) An eating utensil provided by the seller does not include the following used to
1265transport the food:
1266 (i) a container; or
1267 (ii) packaging.
1268 (97) "Prescription" means an order, formula, or recipe that is issued:
1269 (a) (i) orally;
1270 (ii) in writing;
1271 (iii) electronically; or
1272 (iv) by any other manner of transmission; and
1273 (b) by a licensed practitioner authorized by the laws of a state.
1274 (98) (a) Except as provided in Subsection (98)(b)(ii) or (iii), "prewritten computer
1275software" means computer software that is not designed and developed:
1276 (i) by the author or other creator of the computer software; and
1277 (ii) to the specifications of a specific purchaser.
1278 (b) "Prewritten computer software" includes:
1279 (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
1280software is not designed and developed:
1281 (A) by the author or other creator of the computer software; and
1282 (B) to the specifications of a specific purchaser;
1283 (ii) computer software designed and developed by the author or other creator of the
1284computer software to the specifications of a specific purchaser if the computer software is sold
1285to a person other than the purchaser; or
1286 (iii) except as provided in Subsection (98)(c), prewritten computer software or a
1287prewritten portion of prewritten computer software:
1288 (A) that is modified or enhanced to any degree; and
1289 (B) if the modification or enhancement described in Subsection (98)(b)(iii)(A) is
1290designed and developed to the specifications of a specific purchaser.
1291 (c) "Prewritten computer software" does not include a modification or enhancement
1292described in Subsection (98)(b)(iii) if the charges for the modification or enhancement are:
1293 (i) reasonable; and
1294 (ii) subject to Subsections 59-12-103(2)(f)(ii) and (2)(g)(i), separately stated on the 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 43 -
1295invoice or other statement of price provided to the purchaser at the time of sale or later, as
1296demonstrated by:
1297 (A) the books and records the seller keeps at the time of the transaction in the regular
1298course of business, including books and records the seller keeps at the time of the transaction in
1299the regular course of business for nontax purposes;
1300 (B) a preponderance of the facts and circumstances at the time of the transaction; and
1301 (C) the understanding of all of the parties to the transaction.
1302 (99) (a) "Private communications service" means a telecommunications service:
1303 (i) that entitles a customer to exclusive or priority use of one or more communications
1304channels between or among termination points; and
1305 (ii) regardless of the manner in which the one or more communications channels are
1306connected.
1307 (b) "Private communications service" includes the following provided in connection
1308with the use of one or more communications channels:
1309 (i) an extension line;
1310 (ii) a station;
1311 (iii) switching capacity; or
1312 (iv) another associated service that is provided in connection with the use of one or
1313more communications channels as defined in Section 59-12-215.
1314 (100) (a) Except as provided in Subsection (100)(b), "product transferred
1315electronically" means a product transferred electronically that would be subject to a tax under
1316this chapter if that product was transferred in a manner other than electronically.
1317 (b) "Product transferred electronically" does not include:
1318 (i) an ancillary service;
1319 (ii) computer software; or
1320 (iii) a telecommunications service.
1321 (101) (a) "Prosthetic device" means a device that is worn on or in the body to:
1322 (i) artificially replace a missing portion of the body;
1323 (ii) prevent or correct a physical deformity or physical malfunction; or
1324 (iii) support a weak or deformed portion of the body.
1325 (b) "Prosthetic device" includes: 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 44 -
1326 (i) parts used in the repairs or renovation of a prosthetic device;
1327 (ii) replacement parts for a prosthetic device;
1328 (iii) a dental prosthesis; or
1329 (iv) a hearing aid.
1330 (c) "Prosthetic device" does not include:
1331 (i) corrective eyeglasses; or
1332 (ii) contact lenses.
1333 (102) (a) "Protective equipment" means an item:
1334 (i) for human wear; and
1335 (ii) that is:
1336 (A) designed as protection:
1337 (I) to the wearer against injury or disease; or
1338 (II) against damage or injury of other persons or property; and
1339 (B) not suitable for general use.
1340 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1341commission shall make rules:
1342 (i) listing the items that constitute "protective equipment"; and
1343 (ii) that are consistent with the list of items that constitute "protective equipment"
1344under the agreement.
1345 (103) (a) For purposes of Subsection 59-12-104(41), "publication" means any written
1346or printed matter, other than a photocopy:
1347 (i) regardless of:
1348 (A) characteristics;
1349 (B) copyright;
1350 (C) form;
1351 (D) format;
1352 (E) method of reproduction; or
1353 (F) source; and
1354 (ii) made available in printed or electronic format.
1355 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1356commission may by rule define the term "photocopy." 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 45 -
1357 (104) (a) "Purchase price" and "sales price" mean the total amount of consideration:
1358 (i) valued in money; and
1359 (ii) for which tangible personal property, a product transferred electronically, or
1360services are:
1361 (A) sold;
1362 (B) leased; or
1363 (C) rented.
1364 (b) "Purchase price" and "sales price" include:
1365 (i) the seller's cost of the tangible personal property, a product transferred
1366electronically, or services sold;
1367 (ii) expenses of the seller, including:
1368 (A) the cost of materials used;
1369 (B) a labor cost;
1370 (C) a service cost;
1371 (D) interest;
1372 (E) a loss;
1373 (F) the cost of transportation to the seller; or
1374 (G) a tax imposed on the seller;
1375 (iii) a charge by the seller for any service necessary to complete the sale; or
1376 (iv) consideration a seller receives from a person other than the purchaser if:
1377 (A) (I) the seller actually receives consideration from a person other than the purchaser;
1378and
1379 (II) the consideration described in Subsection (104)(b)(iv)(A)(I) is directly related to a
1380price reduction or discount on the sale;
1381 (B) the seller has an obligation to pass the price reduction or discount through to the
1382purchaser;
1383 (C) the amount of the consideration attributable to the sale is fixed and determinable by
1384the seller at the time of the sale to the purchaser; and
1385 (D) (I) (Aa) the purchaser presents a certificate, coupon, or other documentation to the
1386seller to claim a price reduction or discount; and
1387 (Bb) a person other than the seller authorizes, distributes, or grants the certificate, 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 46 -
1388coupon, or other documentation with the understanding that the person other than the seller
1389will reimburse any seller to whom the certificate, coupon, or other documentation is presented;
1390 (II) the purchaser identifies that purchaser to the seller as a member of a group or
1391organization allowed a price reduction or discount, except that a preferred customer card that is
1392available to any patron of a seller does not constitute membership in a group or organization
1393allowed a price reduction or discount; or
1394 (III) the price reduction or discount is identified as a third party price reduction or
1395discount on the:
1396 (Aa) invoice the purchaser receives; or
1397 (Bb) certificate, coupon, or other documentation the purchaser presents.
1398 (c) "Purchase price" and "sales price" do not include:
1399 (i) a discount:
1400 (A) in a form including:
1401 (I) cash;
1402 (II) term; or
1403 (III) coupon;
1404 (B) that is allowed by a seller;
1405 (C) taken by a purchaser on a sale; and
1406 (D) that is not reimbursed by a third party; or
1407 (ii) subject to Subsections 59-12-103(2)(f)(ii) and (2)(g)(i), the following if separately
1408stated on an invoice, bill of sale, or similar document provided to the purchaser at the time of
1409sale or later, as demonstrated by the books and records the seller keeps at the time of the
1410transaction in the regular course of business, including books and records the seller keeps at the
1411time of the transaction in the regular course of business for nontax purposes, by a
1412preponderance of the facts and circumstances at the time of the transaction, and by the
1413understanding of all of the parties to the transaction:
1414 (A) the following from credit extended on the sale of tangible personal property or
1415services:
1416 (I) a carrying charge;
1417 (II) a financing charge; or
1418 (III) an interest charge; 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 47 -
1419 (B) a delivery charge;
1420 (C) an installation charge;
1421 (D) a manufacturer rebate on a motor vehicle; or
1422 (E) a tax or fee legally imposed directly on the consumer.
1423 (105) "Purchaser" means a person to whom:
1424 (a) a sale of tangible personal property is made;
1425 (b) a product is transferred electronically; or
1426 (c) a service is furnished.
1427 (106) "Qualifying data center" means a data center facility that:
1428 (a) houses a group of networked server computers in one physical location in order to
1429disseminate, manage, and store data and information;
1430 (b) is located in the state;
1431 (c) is a new operation constructed on or after July 1, 2016;
1432 (d) consists of one or more buildings that total 150,000 or more square feet;
1433 (e) is owned or leased by:
1434 (i) the operator of the data center facility; or
1435 (ii) a person under common ownership, as defined in Section 59-7-101, of the operator
1436of the data center facility; and
1437 (f) is located on one or more parcels of land that are owned or leased by:
1438 (i) the operator of the data center facility; or
1439 (ii) a person under common ownership, as defined in Section 59-7-101, of the operator
1440of the data center facility.
1441 (107) "Regularly rented" means:
1442 (a) rented to a guest for value three or more times during a calendar year; or
1443 (b) advertised or held out to the public as a place that is regularly rented to guests for
1444value.
1445 (108) "Rental" means the same as that term is defined in Subsection (60).
1446 (109) (a) Except as provided in Subsection (109)(b), "repairs or renovations of tangible
1447personal property" means:
1448 (i) a repair or renovation of tangible personal property that is not permanently attached
1449to real property; or 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 48 -
1450 (ii) attaching tangible personal property or a product transferred electronically to other
1451tangible personal property or detaching tangible personal property or a product transferred
1452electronically from other tangible personal property if:
1453 (A) the other tangible personal property to which the tangible personal property or
1454product transferred electronically is attached or from which the tangible personal property or
1455product transferred electronically is detached is not permanently attached to real property; and
1456 (B) the attachment of tangible personal property or a product transferred electronically
1457to other tangible personal property or detachment of tangible personal property or a product
1458transferred electronically from other tangible personal property is made in conjunction with a
1459repair or replacement of tangible personal property or a product transferred electronically.
1460 (b) "Repairs or renovations of tangible personal property" does not include:
1461 (i) attaching prewritten computer software to other tangible personal property if the
1462other tangible personal property to which the prewritten computer software is attached is not
1463permanently attached to real property; or
1464 (ii) detaching prewritten computer software from other tangible personal property if the
1465other tangible personal property from which the prewritten computer software is detached is
1466not permanently attached to real property.
1467 (110) "Research and development" means the process of inquiry or experimentation
1468aimed at the discovery of facts, devices, technologies, or applications and the process of
1469preparing those devices, technologies, or applications for marketing.
1470 (111) (a) "Residential telecommunications services" means a telecommunications
1471service or an ancillary service that is provided to an individual for personal use:
1472 (i) at a residential address; or
1473 (ii) at an institution, including a nursing home or a school, if the telecommunications
1474service or ancillary service is provided to and paid for by the individual residing at the
1475institution rather than the institution.
1476 (b) For purposes of Subsection (111)(a)(i), a residential address includes an:
1477 (i) apartment; or
1478 (ii) other individual dwelling unit.
1479 (112) "Residential use" means the use in or around a home, apartment building,
1480sleeping quarters, and similar facilities or accommodations. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 49 -
1481 (113) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose other
1482than:
1483 (a) resale;
1484 (b) sublease; or
1485 (c) subrent.
1486 (114) (a) "Retailer" means any person, unless prohibited by the Constitution of the
1487United States or federal law, that is engaged in a regularly organized business in tangible
1488personal property or any other taxable transaction under Subsection 59-12-103(1), and who is
1489selling to the user or consumer and not for resale.
1490 (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
1491engaged in the business of selling to users or consumers within the state.
1492 (115) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
1493otherwise, in any manner, of tangible personal property or any other taxable transaction under
1494Subsection 59-12-103(1), for consideration.
1495 (b) "Sale" includes:
1496 (i) installment and credit sales;
1497 (ii) any closed transaction constituting a sale;
1498 (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
1499chapter;
1500 (iv) any transaction if the possession of property is transferred but the seller retains the
1501title as security for the payment of the price; and
1502 (v) any transaction under which right to possession, operation, or use of any article of
1503tangible personal property is granted under a lease or contract and the transfer of possession
1504would be taxable if an outright sale were made.
1505 (116) "Sale at retail" means the same as that term is defined in Subsection (113).
1506 (117) "Sale-leaseback transaction" means a transaction by which title to tangible
1507personal property or a product transferred electronically that is subject to a tax under this
1508chapter is transferred:
1509 (a) by a purchaser-lessee;
1510 (b) to a lessor;
1511 (c) for consideration; and 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 50 -
1512 (d) if:
1513 (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
1514of the tangible personal property or product transferred electronically;
1515 (ii) the sale of the tangible personal property or product transferred electronically to the
1516lessor is intended as a form of financing:
1517 (A) for the tangible personal property or product transferred electronically; and
1518 (B) to the purchaser-lessee; and
1519 (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
1520is required to:
1521 (A) capitalize the tangible personal property or product transferred electronically for
1522financial reporting purposes; and
1523 (B) account for the lease payments as payments made under a financing arrangement.
1524 (118) "Sales price" means the same as that term is defined in Subsection (104).
1525 (119) (a) "Sales relating to schools" means the following sales by, amounts paid to, or
1526amounts charged by a school:
1527 (i) sales that are directly related to the school's educational functions or activities
1528including:
1529 (A) the sale of:
1530 (I) textbooks;
1531 (II) textbook fees;
1532 (III) laboratory fees;
1533 (IV) laboratory supplies; or
1534 (V) safety equipment;
1535 (B) the sale of a uniform, protective equipment, or sports or recreational equipment
1536that:
1537 (I) a student is specifically required to wear as a condition of participation in a
1538school-related event or school-related activity; and
1539 (II) is not readily adaptable to general or continued usage to the extent that it takes the
1540place of ordinary clothing;
1541 (C) sales of the following if the net or gross revenues generated by the sales are
1542deposited into a school district fund or school fund dedicated to school meals: 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 51 -
1543 (I) food and food ingredients; or
1544 (II) prepared food; or
1545 (D) transportation charges for official school activities; or
1546 (ii) amounts paid to or amounts charged by a school for admission to a school-related
1547event or school-related activity.
1548 (b) "Sales relating to schools" does not include:
1549 (i) bookstore sales of items that are not educational materials or supplies;
1550 (ii) except as provided in Subsection (119)(a)(i)(B):
1551 (A) clothing;
1552 (B) clothing accessories or equipment;
1553 (C) protective equipment; or
1554 (D) sports or recreational equipment; or
1555 (iii) amounts paid to or amounts charged by a school for admission to a school-related
1556event or school-related activity if the amounts paid or charged are passed through to a person:
1557 (A) other than a:
1558 (I) school;
1559 (II) nonprofit organization authorized by a school board or a governing body of a
1560private school to organize and direct a competitive secondary school activity; or
1561 (III) nonprofit association authorized by a school board or a governing body of a
1562private school to organize and direct a competitive secondary school activity; and
1563 (B) that is required to collect sales and use taxes under this chapter.
1564 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1565commission may make rules defining the term "passed through."
1566 (120) For purposes of this section and Section 59-12-104, "school" means:
1567 (a) an elementary school or a secondary school that:
1568 (i) is a:
1569 (A) public school; or
1570 (B) private school; and
1571 (ii) provides instruction for one or more grades kindergarten through 12; or
1572 (b) a public school district.
1573 (121) (a) "Seller" means a person that makes a sale, lease, or rental of: 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 52 -
1574 (i) tangible personal property;
1575 (ii) a product transferred electronically; or
1576 (iii) a service.
1577 (b) "Seller" includes a marketplace facilitator.
1578 (122) (a) "Semiconductor fabricating, processing, research, or development materials"
1579means tangible personal property or a product transferred electronically if the tangible personal
1580property or product transferred electronically is:
1581 (i) used primarily in the process of:
1582 (A) (I) manufacturing a semiconductor;
1583 (II) fabricating a semiconductor; or
1584 (III) research or development of a:
1585 (Aa) semiconductor; or
1586 (Bb) semiconductor manufacturing process; or
1587 (B) maintaining an environment suitable for a semiconductor; or
1588 (ii) consumed primarily in the process of:
1589 (A) (I) manufacturing a semiconductor;
1590 (II) fabricating a semiconductor; or
1591 (III) research or development of a:
1592 (Aa) semiconductor; or
1593 (Bb) semiconductor manufacturing process; or
1594 (B) maintaining an environment suitable for a semiconductor.
1595 (b) "Semiconductor fabricating, processing, research, or development materials"
1596includes:
1597 (i) parts used in the repairs or renovations of tangible personal property or a product
1598transferred electronically described in Subsection (122)(a); or
1599 (ii) a chemical, catalyst, or other material used to:
1600 (A) produce or induce in a semiconductor a:
1601 (I) chemical change; or
1602 (II) physical change;
1603 (B) remove impurities from a semiconductor; or
1604 (C) improve the marketable condition of a semiconductor. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 53 -
1605 (123) "Senior citizen center" means a facility having the primary purpose of providing
1606services to the aged as defined in Section 62A-3-101.
1607 (124) (a) Subject to Subsections (124)(b) and (c), "short-term lodging consumable"
1608means tangible personal property that:
1609 (i) a business that provides accommodations and services described in Subsection
161059-12-103(1)(i) purchases as part of a transaction to provide the accommodations and services
1611to a purchaser;
1612 (ii) is intended to be consumed by the purchaser; and
1613 (iii) is:
1614 (A) included in the purchase price of the accommodations and services; and
1615 (B) not separately stated on an invoice, bill of sale, or other similar document provided
1616to the purchaser.
1617 (b) "Short-term lodging consumable" includes:
1618 (i) a beverage;
1619 (ii) a brush or comb;
1620 (iii) a cosmetic;
1621 (iv) a hair care product;
1622 (v) lotion;
1623 (vi) a magazine;
1624 (vii) makeup;
1625 (viii) a meal;
1626 (ix) mouthwash;
1627 (x) nail polish remover;
1628 (xi) a newspaper;
1629 (xii) a notepad;
1630 (xiii) a pen;
1631 (xiv) a pencil;
1632 (xv) a razor;
1633 (xvi) saline solution;
1634 (xvii) a sewing kit;
1635 (xviii) shaving cream; 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 54 -
1636 (xix) a shoe shine kit;
1637 (xx) a shower cap;
1638 (xxi) a snack item;
1639 (xxii) soap;
1640 (xxiii) toilet paper;
1641 (xxiv) a toothbrush;
1642 (xxv) toothpaste; or
1643 (xxvi) an item similar to Subsections (124)(b)(i) through (xxv) as the commission may
1644provide by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
1645Rulemaking Act.
1646 (c) "Short-term lodging consumable" does not include:
1647 (i) tangible personal property that is cleaned or washed to allow the tangible personal
1648property to be reused; or
1649 (ii) a product transferred electronically.
1650 (125) "Simplified electronic return" means the electronic return:
1651 (a) described in Section 318(C) of the agreement; and
1652 (b) approved by the governing board of the agreement.
1653 (126) "Solar energy" means the sun used as the sole source of energy for producing
1654electricity.
1655 (127) (a) "Sports or recreational equipment" means an item:
1656 (i) designed for human use; and
1657 (ii) that is:
1658 (A) worn in conjunction with:
1659 (I) an athletic activity; or
1660 (II) a recreational activity; and
1661 (B) not suitable for general use.
1662 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1663commission shall make rules:
1664 (i) listing the items that constitute "sports or recreational equipment"; and
1665 (ii) that are consistent with the list of items that constitute "sports or recreational
1666equipment" under the agreement. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 55 -
1667 (128) "State" means the state of Utah, its departments, and agencies.
1668 (129) "Storage" means any keeping or retention of tangible personal property or any
1669other taxable transaction under Subsection 59-12-103(1), in this state for any purpose except
1670sale in the regular course of business.
1671 (130) (a) Except as provided in Subsection (130)(d) or (e), "tangible personal property"
1672means personal property that:
1673 (i) may be:
1674 (A) seen;
1675 (B) weighed;
1676 (C) measured;
1677 (D) felt; or
1678 (E) touched; or
1679 (ii) is in any manner perceptible to the senses.
1680 (b) "Tangible personal property" includes:
1681 (i) electricity;
1682 (ii) water;
1683 (iii) gas;
1684 (iv) steam; or
1685 (v) prewritten computer software, regardless of the manner in which the prewritten
1686computer software is transferred.
1687 (c) "Tangible personal property" includes the following regardless of whether the item
1688is attached to real property:
1689 (i) a dishwasher;
1690 (ii) a dryer;
1691 (iii) a freezer;
1692 (iv) a microwave;
1693 (v) a refrigerator;
1694 (vi) a stove;
1695 (vii) a washer; or
1696 (viii) an item similar to Subsections (130)(c)(i) through (vii) as determined by the
1697commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 56 -
1698Rulemaking Act.
1699 (d) "Tangible personal property" does not include a product that is transferred
1700electronically.
1701 (e) "Tangible personal property" does not include the following if attached to real
1702property, regardless of whether the attachment to real property is only through a line that
1703supplies water, electricity, gas, telephone, cable, or supplies a similar item as determined by the
1704commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
1705Rulemaking Act:
1706 (i) a hot water heater;
1707 (ii) a water filtration system; or
1708 (iii) a water softener system.
1709 (131) (a) "Telecommunications enabling or facilitating equipment, machinery, or
1710software" means an item listed in Subsection (131)(b) if that item is purchased or leased
1711primarily to enable or facilitate one or more of the following to function:
1712 (i) telecommunications switching or routing equipment, machinery, or software; or
1713 (ii) telecommunications transmission equipment, machinery, or software.
1714 (b) The following apply to Subsection (131)(a):
1715 (i) a pole;
1716 (ii) software;
1717 (iii) a supplementary power supply;
1718 (iv) temperature or environmental equipment or machinery;
1719 (v) test equipment;
1720 (vi) a tower; or
1721 (vii) equipment, machinery, or software that functions similarly to an item listed in
1722Subsections (131)(b)(i) through (vi) as determined by the commission by rule made in
1723accordance with Subsection (131)(c).
1724 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1725commission may by rule define what constitutes equipment, machinery, or software that
1726functions similarly to an item listed in Subsections (131)(b)(i) through (vi).
1727 (132) "Telecommunications equipment, machinery, or software required for 911
1728service" means equipment, machinery, or software that is required to comply with 47 C.F.R. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 57 -
1729Sec. 20.18.
1730 (133) "Telecommunications maintenance or repair equipment, machinery, or software"
1731means equipment, machinery, or software purchased or leased primarily to maintain or repair
1732one or more of the following, regardless of whether the equipment, machinery, or software is
1733purchased or leased as a spare part or as an upgrade or modification to one or more of the
1734following:
1735 (a) telecommunications enabling or facilitating equipment, machinery, or software;
1736 (b) telecommunications switching or routing equipment, machinery, or software; or
1737 (c) telecommunications transmission equipment, machinery, or software.
1738 (134) (a) "Telecommunications service" means the electronic conveyance, routing, or
1739transmission of audio, data, video, voice, or any other information or signal to a point, or
1740among or between points.
1741 (b) "Telecommunications service" includes:
1742 (i) an electronic conveyance, routing, or transmission with respect to which a computer
1743processing application is used to act:
1744 (A) on the code, form, or protocol of the content;
1745 (B) for the purpose of electronic conveyance, routing, or transmission; and
1746 (C) regardless of whether the service:
1747 (I) is referred to as voice over Internet protocol service; or
1748 (II) is classified by the Federal Communications Commission as enhanced or value
1749added;
1750 (ii) an 800 service;
1751 (iii) a 900 service;
1752 (iv) a fixed wireless service;
1753 (v) a mobile wireless service;
1754 (vi) a postpaid calling service;
1755 (vii) a prepaid calling service;
1756 (viii) a prepaid wireless calling service; or
1757 (ix) a private communications service.
1758 (c) "Telecommunications service" does not include:
1759 (i) advertising, including directory advertising; 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 58 -
1760 (ii) an ancillary service;
1761 (iii) a billing and collection service provided to a third party;
1762 (iv) a data processing and information service if:
1763 (A) the data processing and information service allows data to be:
1764 (I) (Aa) acquired;
1765 (Bb) generated;
1766 (Cc) processed;
1767 (Dd) retrieved; or
1768 (Ee) stored; and
1769 (II) delivered by an electronic transmission to a purchaser; and
1770 (B) the purchaser's primary purpose for the underlying transaction is the processed data
1771or information;
1772 (v) installation or maintenance of the following on a customer's premises:
1773 (A) equipment; or
1774 (B) wiring;
1775 (vi) Internet access service;
1776 (vii) a paging service;
1777 (viii) a product transferred electronically, including:
1778 (A) music;
1779 (B) reading material;
1780 (C) a ring tone;
1781 (D) software; or
1782 (E) video;
1783 (ix) a radio and television audio and video programming service:
1784 (A) regardless of the medium; and
1785 (B) including:
1786 (I) furnishing conveyance, routing, or transmission of a television audio and video
1787programming service by a programming service provider;
1788 (II) cable service as defined in 47 U.S.C. Sec. 522(6); or
1789 (III) audio and video programming services delivered by a commercial mobile radio
1790service provider as defined in 47 C.F.R. Sec. 20.3; 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 59 -
1791 (x) a value-added nonvoice data service; or
1792 (xi) tangible personal property.
1793 (135) (a) "Telecommunications service provider" means a person that:
1794 (i) owns, controls, operates, or manages a telecommunications service; and
1795 (ii) engages in an activity described in Subsection (135)(a)(i) for the shared use with or
1796resale to any person of the telecommunications service.
1797 (b) A person described in Subsection (135)(a) is a telecommunications service provider
1798whether or not the Public Service Commission of Utah regulates:
1799 (i) that person; or
1800 (ii) the telecommunications service that the person owns, controls, operates, or
1801manages.
1802 (136) (a) "Telecommunications switching or routing equipment, machinery, or
1803software" means an item listed in Subsection (136)(b) if that item is purchased or leased
1804primarily for switching or routing:
1805 (i) an ancillary service;
1806 (ii) data communications;
1807 (iii) voice communications; or
1808 (iv) telecommunications service.
1809 (b) The following apply to Subsection (136)(a):
1810 (i) a bridge;
1811 (ii) a computer;
1812 (iii) a cross connect;
1813 (iv) a modem;
1814 (v) a multiplexer;
1815 (vi) plug in circuitry;
1816 (vii) a router;
1817 (viii) software;
1818 (ix) a switch; or
1819 (x) equipment, machinery, or software that functions similarly to an item listed in
1820Subsections (136)(b)(i) through (ix) as determined by the commission by rule made in
1821accordance with Subsection (136)(c). 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 60 -
1822 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1823commission may by rule define what constitutes equipment, machinery, or software that
1824functions similarly to an item listed in Subsections (136)(b)(i) through (ix).
1825 (137) (a) "Telecommunications transmission equipment, machinery, or software"
1826means an item listed in Subsection (137)(b) if that item is purchased or leased primarily for
1827sending, receiving, or transporting:
1828 (i) an ancillary service;
1829 (ii) data communications;
1830 (iii) voice communications; or
1831 (iv) telecommunications service.
1832 (b) The following apply to Subsection (137)(a):
1833 (i) an amplifier;
1834 (ii) a cable;
1835 (iii) a closure;
1836 (iv) a conduit;
1837 (v) a controller;
1838 (vi) a duplexer;
1839 (vii) a filter;
1840 (viii) an input device;
1841 (ix) an input/output device;
1842 (x) an insulator;
1843 (xi) microwave machinery or equipment;
1844 (xii) an oscillator;
1845 (xiii) an output device;
1846 (xiv) a pedestal;
1847 (xv) a power converter;
1848 (xvi) a power supply;
1849 (xvii) a radio channel;
1850 (xviii) a radio receiver;
1851 (xix) a radio transmitter;
1852 (xx) a repeater; 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 61 -
1853 (xxi) software;
1854 (xxii) a terminal;
1855 (xxiii) a timing unit;
1856 (xxiv) a transformer;
1857 (xxv) a wire; or
1858 (xxvi) equipment, machinery, or software that functions similarly to an item listed in
1859Subsections (137)(b)(i) through (xxv) as determined by the commission by rule made in
1860accordance with Subsection (137)(c).
1861 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1862commission may by rule define what constitutes equipment, machinery, or software that
1863functions similarly to an item listed in Subsections (137)(b)(i) through (xxv).
1864 (138) (a) "Textbook for a higher education course" means a textbook or other printed
1865material that is required for a course:
1866 (i) offered by an institution of higher education; and
1867 (ii) that the purchaser of the textbook or other printed material attends or will attend.
1868 (b) "Textbook for a higher education course" includes a textbook in electronic format.
1869 (139) "Tobacco" means:
1870 (a) a cigarette;
1871 (b) a cigar;
1872 (c) chewing tobacco;
1873 (d) pipe tobacco; or
1874 (e) any other item that contains tobacco.
1875 (140) "Unassisted amusement device" means an amusement device, skill device, or
1876ride device that is started and stopped by the purchaser or renter of the right to use or operate
1877the amusement device, skill device, or ride device.
1878 (141) (a) "Use" means the exercise of any right or power over tangible personal
1879property, a product transferred electronically, or a service under Subsection 59-12-103(1),
1880incident to the ownership or the leasing of that tangible personal property, product transferred
1881electronically, or service.
1882 (b) "Use" does not include the sale, display, demonstration, or trial of tangible personal
1883property, a product transferred electronically, or a service in the regular course of business and 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 62 -
1884held for resale.
1885 (142) "Value-added nonvoice data service" means a service:
1886 (a) that otherwise meets the definition of a telecommunications service except that a
1887computer processing application is used to act primarily for a purpose other than conveyance,
1888routing, or transmission; and
1889 (b) with respect to which a computer processing application is used to act on data or
1890information:
1891 (i) code;
1892 (ii) content;
1893 (iii) form; or
1894 (iv) protocol.
1895 (143) (a) Subject to Subsection (143)(b), "vehicle" means the following that are
1896required to be titled, registered, or titled and registered:
1897 (i) an aircraft as defined in Section 72-10-102;
1898 (ii) a vehicle as defined in Section 41-1a-102;
1899 (iii) an off-highway vehicle as defined in Section 41-22-2; or
1900 (iv) a vessel as defined in Section 41-1a-102.
1901 (b) For purposes of Subsection 59-12-104(33) only, "vehicle" includes:
1902 (i) a vehicle described in Subsection (143)(a); or
1903 (ii) (A) a locomotive;
1904 (B) a freight car;
1905 (C) railroad work equipment; or
1906 (D) other railroad rolling stock.
1907 (144) "Vehicle dealer" means a person engaged in the business of buying, selling, or
1908exchanging a vehicle as defined in Subsection (143).
1909 (145) (a) "Vertical service" means an ancillary service that:
1910 (i) is offered in connection with one or more telecommunications services; and
1911 (ii) offers an advanced calling feature that allows a customer to:
1912 (A) identify a caller; and
1913 (B) manage multiple calls and call connections.
1914 (b) "Vertical service" includes an ancillary service that allows a customer to manage a 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 63 -
1915conference bridging service.
1916 (146) (a) "Voice mail service" means an ancillary service that enables a customer to
1917receive, send, or store a recorded message.
1918 (b) "Voice mail service" does not include a vertical service that a customer is required
1919to have in order to utilize a voice mail service.
1920 (147) (a) Except as provided in Subsection (147)(b), "waste energy facility" means a
1921facility that generates electricity:
1922 (i) using as the primary source of energy waste materials that would be placed in a
1923landfill or refuse pit if it were not used to generate electricity, including:
1924 (A) tires;
1925 (B) waste coal;
1926 (C) oil shale; or
1927 (D) municipal solid waste; and
1928 (ii) in amounts greater than actually required for the operation of the facility.
1929 (b) "Waste energy facility" does not include a facility that incinerates:
1930 (i) hospital waste as defined in 40 C.F.R. 60.51c; or
1931 (ii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
1932 (148) "Watercraft" means a vessel as defined in Section 73-18-2.
1933 (149) "Wind energy" means wind used as the sole source of energy to produce
1934electricity.
1935 (150) "ZIP Code" means a Zoning Improvement Plan Code assigned to a geographic
1936location by the United States Postal Service.
1937 Section 9. Section 59-12-103 is amended to read:
1938 59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
1939tax revenues.
1940 (1) A tax is imposed on the purchaser as provided in this part on the purchase price or
1941sales price for amounts paid or charged for the following transactions:
1942 (a) retail sales of tangible personal property made within the state;
1943 (b) amounts paid for:
1944 (i) telecommunications service, other than mobile telecommunications service, that
1945originates and terminates within the boundaries of this state; 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 64 -
1946 (ii) mobile telecommunications service that originates and terminates within the
1947boundaries of one state only to the extent permitted by the Mobile Telecommunications
1948Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
1949 (iii) an ancillary service associated with a:
1950 (A) telecommunications service described in Subsection (1)(b)(i); or
1951 (B) mobile telecommunications service described in Subsection (1)(b)(ii);
1952 (c) sales of the following for commercial use:
1953 (i) gas;
1954 (ii) electricity;
1955 (iii) heat;
1956 (iv) coal;
1957 (v) fuel oil; or
1958 (vi) other fuels;
1959 (d) sales of the following for residential use:
1960 (i) gas;
1961 (ii) electricity;
1962 (iii) heat;
1963 (iv) coal;
1964 (v) fuel oil; or
1965 (vi) other fuels;
1966 (e) sales of prepared food;
1967 (f) except as provided in Section 59-12-104, amounts paid or charged as admission or
1968user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
1969exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
1970fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
1971television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
1972driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
1973tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
1974horseback rides, sports activities, or any other amusement, entertainment, recreation,
1975exhibition, cultural, or athletic activity;
1976 (g) amounts paid or charged for services for repairs or renovations of tangible personal 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 65 -
1977property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
1978 (i) the tangible personal property; and
1979 (ii) parts used in the repairs or renovations of the tangible personal property described
1980in Subsection (1)(g)(i), regardless of whether:
1981 (A) any parts are actually used in the repairs or renovations of that tangible personal
1982property; or
1983 (B) the particular parts used in the repairs or renovations of that tangible personal
1984property are exempt from a tax under this chapter;
1985 (h) except as provided in Subsection 59-12-104(7), amounts paid or charged for
1986assisted cleaning or washing of tangible personal property;
1987 (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
1988accommodations and services that are regularly rented for less than 30 consecutive days;
1989 (j) amounts paid or charged for laundry or dry cleaning services;
1990 (k) amounts paid or charged for leases or rentals of tangible personal property if within
1991this state the tangible personal property is:
1992 (i) stored;
1993 (ii) used; or
1994 (iii) otherwise consumed;
1995 (l) amounts paid or charged for tangible personal property if within this state the
1996tangible personal property is:
1997 (i) stored;
1998 (ii) used; or
1999 (iii) consumed; and
2000 (m) amounts paid or charged for a sale:
2001 (i) (A) of a product transferred electronically; or
2002 (B) of a repair or renovation of a product transferred electronically; and
2003 (ii) regardless of whether the sale provides:
2004 (A) a right of permanent use of the product; or
2005 (B) a right to use the product that is less than a permanent use, including a right:
2006 (I) for a definite or specified length of time; and
2007 (II) that terminates upon the occurrence of a condition. 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 66 -
2008 (2) (a) Except as provided in Subsections (2)(b) through (f), a state tax and a local tax
2009are imposed on a transaction described in Subsection (1) equal to the sum of:
2010 (i) a state tax imposed on the transaction at a tax rate equal to the sum of:
2011 (A) 4.70% plus the rate specified in Subsection (12)(a); and
2012 (B) (I) the tax rate the state imposes in accordance with Part 18, Additional State Sales
2013and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
2014through 59-12-215 is in a county in which the state imposes the tax under Part 18, Additional
2015State Sales and Use Tax Act; and
2016 (II) the tax rate the state imposes in accordance with Part 20, Supplemental State Sales
2017and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
2018through 59-12-215 is in a city, town, or the unincorporated area of a county in which the state
2019imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
2020 (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
2021transaction under this chapter other than this part.
2022 (b) Except as provided in Subsection (2)(e) or (f) and subject to Subsection (2)(k), a
2023state tax and a local tax are imposed on a transaction described in Subsection (1)(d) equal to
2024the sum of:
2025 (i) a state tax imposed on the transaction at a tax rate of 2%; and
2026 (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
2027transaction under this chapter other than this part.
2028 (c) (i) Except as provided in Subsection (2)(e) or (f), a local tax is imposed on amounts
2029paid or charged for food and food ingredients equal to the sum of the tax rates a county, city, or
2030town imposes under this chapter on the amounts paid or charged for food or food ingredients.
2031 (ii) There is no state tax imposed on amounts paid or charged for food and food
2032ingredients.
2033 [(c) Except as provided in Subsection (2)(e) or (f), a state tax and a local tax are
2034imposed on amounts paid or charged for food and food ingredients equal to the sum of:]
2035 [(i) a state tax imposed on the amounts paid or charged for food and food ingredients at
2036a tax rate of 1.75%; and]
2037 [(ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
2038amounts paid or charged for food and food ingredients under this chapter other than this part.] 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 67 -
2039 (d) Except as provided in Subsection (2)(e) or (f), a state tax is imposed on amounts
2040paid or charged for fuel to a common carrier that is a railroad for use in a locomotive engine at
2041a rate of 4.85%.
2042 (e) (i) For a bundled transaction that is attributable to food and food ingredients and
2043tangible personal property other than food and food ingredients, a state tax and a local tax is
2044imposed on the entire bundled transaction equal to the sum of:
2045 (A) a state tax imposed on the entire bundled transaction equal to the sum of:
2046 (I) the tax rate described in Subsection (2)(a)(i)(A); and
2047 (II) (Aa) the tax rate the state imposes in accordance with Part 18, Additional State
2048Sales and Use Tax Act, if the location of the transaction as determined under Sections
204959-12-211 through 59-12-215 is in a county in which the state imposes the tax under Part 18,
2050Additional State Sales and Use Tax Act; and
2051 (Bb) the tax rate the state imposes in accordance with Part 20, Supplemental State
2052Sales and Use Tax Act, if the location of the transaction as determined under Sections
205359-12-211 through 59-12-215 is in a city, town, or the unincorporated area of a county in which
2054the state imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
2055 (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
2056described in Subsection (2)(a)(ii).
2057 (ii) If an optional computer software maintenance contract is a bundled transaction that
2058consists of taxable and nontaxable products that are not separately itemized on an invoice or
2059similar billing document, the purchase of the optional computer software maintenance contract
2060is 40% taxable under this chapter and 60% nontaxable under this chapter.
2061 (iii) Subject to Subsection (2)(e)(iv), for a bundled transaction other than a bundled
2062transaction described in Subsection (2)(e)(i) or (ii):
2063 (A) if the sales price of the bundled transaction is attributable to tangible personal
2064property, a product, or a service that is subject to taxation under this chapter and tangible
2065personal property, a product, or service that is not subject to taxation under this chapter, the
2066entire bundled transaction is subject to taxation under this chapter unless:
2067 (I) the seller is able to identify by reasonable and verifiable standards the tangible
2068personal property, product, or service that is not subject to taxation under this chapter from the
2069books and records the seller keeps in the seller's regular course of business; or 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 68 -
2070 (II) state or federal law provides otherwise; or
2071 (B) if the sales price of a bundled transaction is attributable to two or more items of
2072tangible personal property, products, or services that are subject to taxation under this chapter
2073at different rates, the entire bundled transaction is subject to taxation under this chapter at the
2074higher tax rate unless:
2075 (I) the seller is able to identify by reasonable and verifiable standards the tangible
2076personal property, product, or service that is subject to taxation under this chapter at the lower
2077tax rate from the books and records the seller keeps in the seller's regular course of business; or
2078 (II) state or federal law provides otherwise.
2079 (iv) For purposes of Subsection (2)(e)(iii), books and records that a seller keeps in the
2080seller's regular course of business includes books and records the seller keeps in the regular
2081course of business for nontax purposes.
2082 (f) (i) Except as otherwise provided in this chapter and subject to Subsections (2)(f)(ii)
2083and (iii), if a transaction consists of the sale, lease, or rental of tangible personal property, a
2084product, or a service that is subject to taxation under this chapter, and the sale, lease, or rental
2085of tangible personal property, other property, a product, or a service that is not subject to
2086taxation under this chapter, the entire transaction is subject to taxation under this chapter unless
2087the seller, at the time of the transaction:
2088 (A) separately states the portion of the transaction that is not subject to taxation under
2089this chapter on an invoice, bill of sale, or similar document provided to the purchaser; or
2090 (B) is able to identify by reasonable and verifiable standards, from the books and
2091records the seller keeps in the seller's regular course of business, the portion of the transaction
2092that is not subject to taxation under this chapter.
2093 (ii) A purchaser and a seller may correct the taxability of a transaction if:
2094 (A) after the transaction occurs, the purchaser and the seller discover that the portion of
2095the transaction that is not subject to taxation under this chapter was not separately stated on an
2096invoice, bill of sale, or similar document provided to the purchaser because of an error or
2097ignorance of the law; and
2098 (B) the seller is able to identify by reasonable and verifiable standards, from the books
2099and records the seller keeps in the seller's regular course of business, the portion of the
2100transaction that is not subject to taxation under this chapter. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 69 -
2101 (iii) For purposes of Subsections (2)(f)(i) and (ii), books and records that a seller keeps
2102in the seller's regular course of business includes books and records the seller keeps in the
2103regular course of business for nontax purposes.
2104 (g) (i) If the sales price of a transaction is attributable to two or more items of tangible
2105personal property, products, or services that are subject to taxation under this chapter at
2106different rates, the entire purchase is subject to taxation under this chapter at the higher tax rate
2107unless the seller, at the time of the transaction:
2108 (A) separately states the items subject to taxation under this chapter at each of the
2109different rates on an invoice, bill of sale, or similar document provided to the purchaser; or
2110 (B) is able to identify by reasonable and verifiable standards the tangible personal
2111property, product, or service that is subject to taxation under this chapter at the lower tax rate
2112from the books and records the seller keeps in the seller's regular course of business.
2113 (ii) For purposes of Subsection (2)(g)(i), books and records that a seller keeps in the
2114seller's regular course of business includes books and records the seller keeps in the regular
2115course of business for nontax purposes.
2116 (h) Subject to Subsections (2)(i) and (j), a tax rate repeal or tax rate change for a tax
2117rate imposed under the following shall take effect on the first day of a calendar quarter:
2118 (i) Subsection (2)(a)(i)(A);
2119 (ii) Subsection (2)(b)(i); or
2120 [(iii) Subsection (2)(c)(i); or]
2121 [(iv)] (iii) Subsection (2)(e)(i)(A)(I).
2122 (i) (i) A tax rate increase takes effect on the first day of the first billing period that
2123begins on or after the effective date of the tax rate increase if the billing period for the
2124transaction begins before the effective date of a tax rate increase imposed under:
2125 (A) Subsection (2)(a)(i)(A);
2126 (B) Subsection (2)(b)(i); or
2127 [(C) Subsection (2)(c)(i); or]
2128 [(D)] (C) Subsection (2)(e)(i)(A)(I).
2129 (ii) The repeal of a tax or a tax rate decrease applies to a billing period if the billing
2130statement for the billing period is rendered on or after the effective date of the repeal of the tax
2131or the tax rate decrease imposed under: 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 70 -
2132 (A) Subsection (2)(a)(i)(A);
2133 (B) Subsection (2)(b)(i); or
2134 [(C) Subsection (2)(c)(i); or]
2135 [(D)] (C) Subsection (2)(e)(i)(A)(I).
2136 (j) (i) For a tax rate described in Subsection (2)(j)(ii), if a tax due on a catalogue sale is
2137computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal or
2138change in a tax rate takes effect:
2139 (A) on the first day of a calendar quarter; and
2140 (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
2141 (ii) Subsection (2)(j)(i) applies to the tax rates described in the following:
2142 (A) Subsection (2)(a)(i)(A);
2143 (B) Subsection (2)(b)(i); or
2144 [(C) Subsection (2)(c)(i); or]
2145 [(D)] (C) Subsection (2)(e)(i)(A)(I).
2146 (iii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
2147the commission may by rule define the term "catalogue sale."
2148 (k) (i) For a location described in Subsection (2)(k)(ii), the commission shall determine
2149the taxable status of a sale of gas, electricity, heat, coal, fuel oil, or other fuel based on the
2150predominant use of the gas, electricity, heat, coal, fuel oil, or other fuel at the location.
2151 (ii) Subsection (2)(k)(i) applies to a location where gas, electricity, heat, coal, fuel oil,
2152or other fuel is furnished through a single meter for two or more of the following uses:
2153 (A) a commercial use;
2154 (B) an industrial use; or
2155 (C) a residential use.
2156 (3) (a) The following state taxes shall be deposited into the General Fund:
2157 (i) the tax imposed by Subsection (2)(a)(i)(A);
2158 (ii) the tax imposed by Subsection (2)(b)(i); and
2159 [(iii) the tax imposed by Subsection (2)(c)(i); and]
2160 [(iv)] (iii) the tax imposed by Subsection (2)(e)(i)(A)(I).
2161 (b) The following local taxes shall be distributed to a county, city, or town as provided
2162in this chapter: 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 71 -
2163 (i) the tax imposed by Subsection (2)(a)(ii);
2164 (ii) the tax imposed by Subsection (2)(b)(ii);
2165 (iii) the tax imposed by Subsection [(2)(c)(ii)] (2)(c); and
2166 (iv) the tax imposed by Subsection (2)(e)(i)(B).
2167 (c) The state tax imposed by Subsection (2)(d) shall be deposited into the General
2168Fund.
2169 (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
21702003, the lesser of the following amounts shall be expended as provided in Subsections (4)(b)
2171through (g):
2172 (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
2173 (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
2174 (B) for the fiscal year; or
2175 (ii) $17,500,000.
2176 (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
2177described in Subsection (4)(a) shall be transferred each year as designated sales and use tax
2178revenue to the Department of Natural Resources to:
2179 (A) implement the measures described in Subsections 79-2-303(3)(a) through (d) to
2180protect sensitive plant and animal species; or
2181 (B) award grants, up to the amount authorized by the Legislature in an appropriations
2182act, to political subdivisions of the state to implement the measures described in Subsections
218379-2-303(3)(a) through (d) to protect sensitive plant and animal species.
2184 (ii) Money transferred to the Department of Natural Resources under Subsection
2185(4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
2186person to list or attempt to have listed a species as threatened or endangered under the
2187Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
2188 (iii) At the end of each fiscal year:
2189 (A) 50% of any unexpended designated sales and use tax revenue shall lapse to the
2190Water Resources Conservation and Development Fund created in Section 73-10-24;
2191 (B) 25% of any unexpended designated sales and use tax revenue shall lapse to the
2192Utah Wastewater Loan Program Subaccount created in Section 73-10c-5; and
2193 (C) 25% of any unexpended designated sales and use tax revenue shall lapse to the 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 72 -
2194Drinking Water Loan Program Subaccount created in Section 73-10c-5.
2195 (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
2196Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
2197created in Section 4-18-106.
2198 (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
2199in Subsection (4)(a) shall be transferred each year as designated sales and use tax revenue to
2200the Division of Water Rights to cover the costs incurred in hiring legal and technical staff for
2201the adjudication of water rights.
2202 (ii) At the end of each fiscal year:
2203 (A) 50% of any unexpended designated sales and use tax revenue shall lapse to the
2204Water Resources Conservation and Development Fund created in Section 73-10-24;
2205 (B) 25% of any unexpended designated sales and use tax revenue shall lapse to the
2206Utah Wastewater Loan Program Subaccount created in Section 73-10c-5; and
2207 (C) 25% of any unexpended designated sales and use tax revenue shall lapse to the
2208Drinking Water Loan Program Subaccount created in Section 73-10c-5.
2209 (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
2210in Subsection (4)(a) shall be deposited into the Water Resources Conservation and
2211Development Fund created in Section 73-10-24 for use by the Division of Water Resources.
2212 (ii) In addition to the uses allowed of the Water Resources Conservation and
2213Development Fund under Section 73-10-24, the Water Resources Conservation and
2214Development Fund may also be used to:
2215 (A) conduct hydrologic and geotechnical investigations by the Division of Water
2216Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
2217quantifying surface and ground water resources and describing the hydrologic systems of an
2218area in sufficient detail so as to enable local and state resource managers to plan for and
2219accommodate growth in water use without jeopardizing the resource;
2220 (B) fund state required dam safety improvements; and
2221 (C) protect the state's interest in interstate water compact allocations, including the
2222hiring of technical and legal staff.
2223 (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
2224in Subsection (4)(a) shall be deposited into the Utah Wastewater Loan Program Subaccount 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 73 -
2225created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
2226 (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
2227in Subsection (4)(a) shall be deposited into the Drinking Water Loan Program Subaccount
2228created in Section 73-10c-5 for use by the Division of Drinking Water to:
2229 (i) provide for the installation and repair of collection, treatment, storage, and
2230distribution facilities for any public water system, as defined in Section 19-4-102;
2231 (ii) develop underground sources of water, including springs and wells; and
2232 (iii) develop surface water sources.
2233 (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
22342006, the difference between the following amounts shall be expended as provided in this
2235Subsection (5), if that difference is greater than $1:
2236 (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
2237fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
2238 (ii) $17,500,000.
2239 (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
2240 (A) transferred each fiscal year to the Department of Natural Resources as designated
2241sales and use tax revenue; and
2242 (B) expended by the Department of Natural Resources for watershed rehabilitation or
2243restoration.
2244 (ii) At the end of each fiscal year, 100% of any unexpended designated sales and use
2245tax revenue described in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation
2246and Development Fund created in Section 73-10-24.
2247 (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
2248remaining difference described in Subsection (5)(a) shall be:
2249 (A) transferred each fiscal year to the Division of Water Resources as designated sales
2250and use tax revenue; and
2251 (B) expended by the Division of Water Resources for cloud-seeding projects
2252authorized by Title 73, Chapter 15, Modification of Weather.
2253 (ii) At the end of each fiscal year, 100% of any unexpended designated sales and use
2254tax revenue described in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation
2255and Development Fund created in Section 73-10-24. 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 74 -
2256 (d) After making the transfers required by Subsections (5)(b) and (c), 85% of the
2257remaining difference described in Subsection (5)(a) shall be deposited into the Water
2258Resources Conservation and Development Fund created in Section 73-10-24 for use by the
2259Division of Water Resources for:
2260 (i) preconstruction costs:
2261 (A) as defined in Subsection 73-26-103(6) for projects authorized by Title 73, Chapter
226226, Bear River Development Act; and
2263 (B) as defined in Subsection 73-28-103(8) for the Lake Powell Pipeline project
2264authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
2265 (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
2266Chapter 26, Bear River Development Act;
2267 (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
2268authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
2269 (iv) other uses authorized under Sections 73-10-24, 73-10-25.1, and 73-10-30, and
2270Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
2271 (e) After making the transfers required by Subsections (5)(b) and (c), 15% of the
2272remaining difference described in Subsection (5)(a) shall be deposited each year into the Water
2273Rights Restricted Account created by Section 73-2-1.6.
2274 (6) Notwithstanding Subsection (3)(a) and for taxes listed under Subsection (3)(a), the
2275amount of revenue generated by a 1/16% tax rate on the transactions described in Subsection
2276(1) for the fiscal year shall be deposited as follows:
2277 (a) for fiscal year 2020-21 only:
2278 (i) 20% of the revenue described in this Subsection (6) shall be deposited into the
2279Transportation Investment Fund of 2005 created by Section 72-2-124; and
2280 (ii) 80% of the revenue described in this Subsection (6) shall be deposited into the
2281Water Infrastructure Restricted Account created by Section 73-10g-103; and
2282 (b) for a fiscal year beginning on or after July 1, 2021, 100% of the revenue described
2283in this Subsection (6) shall be deposited into the Water Infrastructure Restricted Account
2284created by Section 73-10g-103.
2285 (7) (a) Notwithstanding Subsection (3)(a), in addition to the amounts deposited in
2286Subsection (6), and subject to Subsection (7)(b), for a fiscal year beginning on or after July 1, 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 75 -
22872012, the Division of Finance shall deposit into the Transportation Investment Fund of 2005
2288created by Section 72-2-124:
2289 (i) a portion of the taxes listed under Subsection (3)(a) in an amount equal to 8.3% of
2290the revenues collected from the following taxes, which represents a portion of the
2291approximately 17% of sales and use tax revenues generated annually by the sales and use tax
2292on vehicles and vehicle-related products:
2293 (A) the tax imposed by Subsection (2)(a)(i)(A) at a 4.7% rate;
2294 (B) the tax imposed by Subsection (2)(b)(i); and
2295 [(C) the tax imposed by Subsection (2)(c)(i); and]
2296 [(D)] (C) the tax imposed by Subsection (2)(e)(i)(A)(I); plus
2297 (ii) an amount equal to 30% of the growth in the amount of revenues collected in the
2298current fiscal year from the sales and use taxes described in Subsections (7)(a)(i)(A) through
2299[(D)] (C) that exceeds the amount collected from the sales and use taxes described in
2300Subsections (7)(a)(i)(A) through [(D)] (C) in the 2010-11 fiscal year.
2301 (b) (i) Subject to Subsections (7)(b)(ii) and (iii), in any fiscal year that the portion of
2302the sales and use taxes deposited under Subsection (7)(a) represents an amount that is a total
2303lower percentage of the sales and use taxes described in Subsections (7)(a)(i)(A) through [(D)]
2304(C) generated in the current fiscal year than the total percentage of sales and use taxes
2305deposited in the previous fiscal year, the Division of Finance shall deposit an amount under
2306Subsection (7)(a) equal to the product of:
2307 (A) the total percentage of sales and use taxes deposited under Subsection (7)(a) in the
2308previous fiscal year; and
2309 (B) the total sales and use tax revenue generated by the taxes described in Subsections
2310(7)(a)(i)(A) through [(D)] (C) in the current fiscal year.
2311 (ii) In any fiscal year in which the portion of the sales and use taxes deposited under
2312Subsection (7)(a) would exceed 17% of the revenues collected from the sales and use taxes
2313described in Subsections (7)(a)(i)(A) through [(D)] (C) in the current fiscal year, the Division
2314of Finance shall deposit 17% of the revenues collected from the sales and use taxes described
2315in Subsections (7)(a)(i)(A) through [(D)] (C) for the current fiscal year under Subsection (7)(a).
2316 (iii) Subject to Subsection (7)(b)(iv)(E), in all subsequent fiscal years after a year in
2317which 17% of the revenues collected from the sales and use taxes described in Subsections 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 76 -
2318(7)(a)(i)(A) through [(D)] (C) was deposited under Subsection (7)(a), the Division of Finance
2319shall annually deposit 17% of the revenues collected from the sales and use taxes described in
2320Subsections (7)(a)(i)(A) through [(D)] (C) in the current fiscal year under Subsection (7)(a).
2321 (iv) (A) As used in this Subsection (7)(b)(iv), "additional growth revenue" means the
2322amount of relevant revenue collected in the current fiscal year that exceeds by more than 3%
2323the relevant revenue collected in the previous fiscal year.
2324 (B) As used in this Subsection (7)(b)(iv), "combined amount" means the combined
2325total amount of money deposited into the Cottonwood Canyons fund under Subsections
2326(7)(b)(iv)(F) and (8)(d)(vi) in any single fiscal year.
2327 (C) As used in this Subsection (7)(b)(iv), "Cottonwood Canyons fund" means the
2328Cottonwood Canyons Transportation Investment Fund created in Subsection 72-2-124(10).
2329 (D) As used in this Subsection (7)(b)(iv), "relevant revenue" means the portion of taxes
2330listed under Subsection (3)(a) that equals 17% of the revenue collected from taxes described in
2331Subsections (7)(a)(i)(A) through [(D)] (C).
2332 (E) For a fiscal year beginning on or after July 1, 2020, the commission shall annually
2333reduce the deposit under Subsection (7)(b)(iii) into the Transportation Investment Fund of 2005
2334by an amount equal to the amount of the deposit under this Subsection (7)(b)(iv) to the
2335Cottonwood Canyons fund in the previous fiscal year plus 25% of additional growth revenue,
2336subject to the limit in Subsection (7)(b)(iv)(F).
2337 (F) The commission shall annually deposit the amount described in Subsection
2338(7)(b)(iv)(E) into the Cottonwood Canyons fund, subject to an annual maximum combined
2339amount for any single fiscal year of $20,000,000.
2340 (G) If the amount of relevant revenue declines in a fiscal year compared to the previous
2341fiscal year, the commission shall decrease the amount of the contribution to the Cottonwood
2342Canyons fund under this Subsection (7)(b)(iv) in the same proportion as the decline in relevant
2343revenue.
2344 (8) (a) Notwithstanding Subsection (3)(a), in addition to the amounts deposited under
2345Subsections (6) and (7), and subject to Subsections (8)(b) and (d)(v), for a fiscal year beginning
2346on or after July 1, 2018, the commission shall annually deposit into the Transportation
2347Investment Fund of 2005 created by Section 72-2-124 a portion of the taxes listed under
2348Subsection (3)(a) in an amount equal to 3.68% of the revenues collected from the following 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 77 -
2349taxes:
2350 (i) the tax imposed by Subsection (2)(a)(i)(A) at a 4.7% rate;
2351 (ii) the tax imposed by Subsection (2)(b)(i); and
2352 [(iii) the tax imposed by Subsection (2)(c)(i); and]
2353 [(iv)] (iii) the tax imposed by Subsection (2)(e)(i)(A)(I).
2354 (b) For a fiscal year beginning on or after July 1, 2019, the commission shall annually
2355reduce the deposit into the Transportation Investment Fund of 2005 under Subsection (8)(a) by
2356an amount that is equal to 35% of the amount of revenue generated in the current fiscal year by
2357the portion of the tax imposed on motor and special fuel that is sold, used, or received for sale
2358or use in this state that exceeds 29.4 cents per gallon.
2359 (c) The commission shall annually deposit the amount described in Subsection (8)(b)
2360into the Transit Transportation Investment Fund created in Section 72-2-124.
2361 (d) (i) As used in this Subsection (8)(d), "additional growth revenue" means the
2362amount of relevant revenue collected in the current fiscal year that exceeds by more than 3%
2363the relevant revenue collected in the previous fiscal year.
2364 (ii) As used in this Subsection (8)(d), "combined amount" means the combined total
2365amount of money deposited into the Cottonwood Canyons fund under Subsections (7)(b)(iv)(F)
2366and (8)(d)(vi) in any single fiscal year.
2367 (iii) As used in this Subsection (8)(d), "Cottonwood Canyons fund" means the
2368Cottonwood Canyons Transportation Investment Fund created in Subsection 72-2-124(10).
2369 (iv) As used in this Subsection (8)(d), "relevant revenue" means the portion of taxes
2370listed under Subsection (3)(a) that equals 3.68% of the revenue collected from taxes described
2371in Subsections (8)(a)(i) through [(iv)] (iii).
2372 (v) For a fiscal year beginning on or after July 1, 2020, the commission shall annually
2373reduce the deposit under Subsection (8)(a) into the Transportation Investment Fund of 2005 by
2374an amount equal to the amount of the deposit under this Subsection (8)(d) to the Cottonwood
2375Canyons fund in the previous fiscal year plus 25% of additional growth revenue, subject to the
2376limit in Subsection (8)(d)(vi).
2377 (vi) The commission shall annually deposit the amount described in Subsection
2378(8)(d)(v) into the Cottonwood Canyons fund, subject to an annual maximum combined amount
2379for any single fiscal year of $20,000,000. 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 78 -
2380 (vii) If the amount of relevant revenue declines in a fiscal year compared to the
2381previous fiscal year, the commission shall decrease the amount of the contribution to the
2382Cottonwood Canyons fund under this Subsection (8)(d) in the same proportion as the decline in
2383relevant revenue.
2384 (9) Notwithstanding Subsection (3)(a), for each fiscal year beginning with fiscal year
23852009-10, $533,750 shall be deposited into the Qualified Emergency Food Agencies Fund
2386created by Section 35A-8-1009 and expended as provided in Section 35A-8-1009.
2387 (10) (a) Notwithstanding Subsection (3)(a), except as provided in Subsection (10)(b),
2388and in addition to any amounts deposited under Subsections (6), (7), and (8), the Division of
2389Finance shall deposit into the Transportation Investment Fund of 2005 created by Section
239072-2-124 the amount of revenue described as follows:
2391 (i) for fiscal year 2020-21 only, 33.33% of the amount of revenue generated by a .05%
2392tax rate on the transactions described in Subsection (1); and
2393 (ii) for fiscal year 2021-22 only, 16.67% of the amount of revenue generated by a .05%
2394tax rate on the transactions described in Subsection (1).
2395 (b) For purposes of Subsection (10)(a), the Division of Finance may not deposit into
2396the Transportation Investment Fund of 2005 any tax revenue generated by amounts paid or
2397charged for food and food ingredients, except for tax revenue generated by a bundled
2398transaction attributable to food and food ingredients and tangible personal property other than
2399food and food ingredients described in Subsection (2)(e).
2400 (11) Notwithstanding Subsection (3)(a), beginning the second fiscal year after the
2401fiscal year during which the Division of Finance receives notice under Section 63N-2-510 that
2402construction on a qualified hotel, as defined in Section 63N-2-502, has begun, the Division of
2403Finance shall, for two consecutive fiscal years, annually deposit $1,900,000 of the revenue
2404generated by the taxes listed under Subsection (3)(a) into the Hotel Impact Mitigation Fund,
2405created in Section 63N-2-512.
2406 (12) (a) The rate specified in this subsection is 0.15%.
2407 (b) Notwithstanding Subsection (3)(a), the Division of Finance shall, for a fiscal year
2408beginning on or after July 1, 2019, annually transfer the amount of revenue collected from the
2409rate described in Subsection (12)(a) on the transactions that are subject to the sales and use tax
2410under Subsection (2)(a)(i)(A) into the Medicaid Expansion Fund created in Section 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 79 -
241126-36b-208.
2412 (13) Notwithstanding Subsection (3)(a), for each fiscal year beginning with fiscal year
24132020-21, the Division of Finance shall deposit $200,000 into the General Fund as a dedicated
2414credit solely for use of the Search and Rescue Financial Assistance Program created in, and
2415expended in accordance with, Title 53, Chapter 2a, Part 11, Search and Rescue Act.
2416 (14) (a) For each fiscal year beginning with fiscal year 2020-21, the Division of
2417Finance shall annually transfer $1,813,400 of the revenue deposited into the Transportation
2418Investment Fund of 2005 under Subsections (6) through (8) to the General Fund.
2419 (b) If the total revenue deposited into the Transportation Investment Fund of 2005
2420under Subsections (6) through (8) is less than $1,813,400 for a fiscal year, the Division of
2421Finance shall transfer the total revenue deposited into the Transportation Investment Fund of
24222005 under Subsections (6) through (8) during the fiscal year to the General Fund.
2423 (15) Notwithstanding Subsection (3)(a), and as described in Section 63N-3-610,
2424beginning the first day of the calendar quarter one year after the sales and use tax boundary for
2425a housing and transit reinvestment zone is established, the commission, at least annually, shall
2426transfer an amount equal to 15% of the sales and use tax increment within an established sales
2427and use tax boundary, as defined in Section 63N-3-602, into the Transit Transportation
2428Investment Fund created in Section 72-2-124.
2429 (16) Notwithstanding Subsection (3)(a), the Division of Finance shall, for a fiscal year
2430beginning on or after July 1, 2022, transfer into the Outdoor Adventure Infrastructure
2431Restricted Account, created in Section 51-9-902, a portion of the taxes listed under Subsection
2432(3)(a) equal to 1% of the revenues collected from the following sales and use taxes:
2433 (a) the tax imposed by Subsection (2)(a)(i)(A) at a 4.7% rate;
2434 (b) the tax imposed by Subsection (2)(b)(i); and
2435 [(c) the tax imposed by Subsection (2)(c)(i); and]
2436 [(d)] (c) the tax imposed by Subsection (2)(e)(i)(A)(I).
2437 Section 10. Section 59-12-108 is amended to read:
2438 59-12-108. Monthly payment -- Amount of tax a seller may retain -- Penalty --
2439Certain amounts allocated to local taxing jurisdictions.
2440 (1) (a) Notwithstanding Section 59-12-107, a seller that has a tax liability under this
2441chapter of $50,000 or more for the previous calendar year shall: 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 80 -
2442 (i) file a return with the commission:
2443 (A) monthly on or before the last day of the month immediately following the month
2444for which the seller collects a tax under this chapter; and
2445 (B) for the month for which the seller collects a tax under this chapter; and
2446 (ii) except as provided in Subsection (1)(b), remit with the return required by
2447Subsection (1)(a)(i) the amount the person is required to remit to the commission for each tax,
2448fee, or charge described in Subsection (1)(c):
2449 (A) if that seller's tax liability under this chapter for the previous calendar year is less
2450than $96,000, by any method permitted by the commission; or
2451 (B) if that seller's tax liability under this chapter for the previous calendar year is
2452$96,000 or more, by electronic funds transfer.
2453 (b) A seller shall remit electronically with the return required by Subsection (1)(a)(i)
2454the amount the seller is required to remit to the commission for each tax, fee, or charge
2455described in Subsection (1)(c) if that seller:
2456 (i) is required by Section 59-12-107 to file the return electronically; or
2457 (ii) (A) is required to collect and remit a tax under Section 59-12-107; and
2458 (B) files a simplified electronic return.
2459 (c) Subsections (1)(a) and (b) apply to the following taxes, fees, or charges:
2460 (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
2461 (ii) a fee under Section 19-6-714;
2462 (iii) a fee under Section 19-6-805;
2463 (iv) a charge under Title 69, Chapter 2, Part 4, Prepaid Wireless Telecommunications
2464Service Charges; or
2465 (v) a tax under this chapter.
2466 (d) Notwithstanding Subsection (1)(a)(ii) and in accordance with Title 63G, Chapter 3,
2467Utah Administrative Rulemaking Act, the commission shall make rules providing for a method
2468for making same-day payments other than by electronic funds transfer if making payments by
2469electronic funds transfer fails.
2470 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
2471commission shall establish by rule procedures and requirements for determining the amount a
2472seller is required to remit to the commission under this Subsection (1). 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 81 -
2473 (2) (a) Except as provided in Subsection (3), a seller subject to Subsection (1) or a
2474seller described in Subsection (4) may retain each month the amount allowed by this
2475Subsection (2).
2476 (b) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain
2477each month 1.31% of any amounts the seller is required to remit to the commission:
2478 (i) for a transaction described in Subsection 59-12-103(1) that is subject to a state tax
2479and a local tax imposed in accordance with the following, for the month for which the seller is
2480filing a return in accordance with Subsection (1):
2481 (A) Subsection 59-12-103(2)(a);
2482 (B) Subsection 59-12-103(2)(b); and
2483 (C) Subsection 59-12-103(2)(d); and
2484 (ii) for an agreement sales and use tax.
2485 (c) (i) A seller subject to Subsection (1) or a seller described in Subsection (4) may
2486retain each month the amount calculated under Subsection (2)(c)(ii) for a transaction described
2487in Subsection 59-12-103(1) that is subject to the [state tax and the local] tax imposed in
2488accordance with Subsection 59-12-103(2)(c).
2489 (ii) For purposes of Subsection (2)(c)(i), the amount a seller may retain is an amount
2490equal to the sum of:
2491 (A) 1.31% of any amounts the seller is required to remit to the commission for:
2492 (I) the [state tax and the local] tax imposed in accordance with Subsection
249359-12-103(2)(c);
2494 (II) the month for which the seller is filing a return in accordance with Subsection (1);
2495and
2496 (III) an agreement sales and use tax; and
2497 (B) 1.31% of the difference between:
2498 (I) the amounts the seller would have been required to remit to the commission:
2499 (Aa) in accordance with Subsection 59-12-103(2)(a) if the transaction had been subject
2500to the state tax and the local tax imposed in accordance with Subsection 59-12-103(2)(a);
2501 (Bb) for the month for which the seller is filing a return in accordance with Subsection
2502(1); and
2503 (Cc) for an agreement sales and use tax; and 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 82 -
2504 (II) the amounts the seller is required to remit to the commission for:
2505 (Aa) the [state tax and the local] tax imposed in accordance with Subsection
250659-12-103(2)(c);
2507 (Bb) the month for which the seller is filing a return in accordance with Subsection (1);
2508and
2509 (Cc) an agreement sales and use tax.
2510 (d) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain
2511each month 1% of any amounts the seller is required to remit to the commission:
2512 (i) for the month for which the seller is filing a return in accordance with Subsection
2513(1); and
2514 (ii) under:
2515 (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
2516 (B) Subsection 59-12-603(1)(a)(i)(A);
2517 (C) Subsection 59-12-603(1)(a)(i)(B); or
2518 (D) Subsection 59-12-603(1)(a)(ii).
2519 (3) A state government entity that is required to remit taxes monthly in accordance
2520with Subsection (1) may not retain any amount under Subsection (2).
2521 (4) A seller that has a tax liability under this chapter for the previous calendar year of
2522less than $50,000 may:
2523 (a) voluntarily meet the requirements of Subsection (1); and
2524 (b) if the seller voluntarily meets the requirements of Subsection (1), retain the
2525amounts allowed by Subsection (2).
2526 (5) Penalties for late payment shall be as provided in Section 59-1-401.
2527 (6) (a) Except as provided in Subsection (6)(c), for any amounts required to be remitted
2528to the commission under this part, the commission shall each month calculate an amount equal
2529to the difference between:
2530 (i) the total amount retained for that month by all sellers had the percentages listed
2531under Subsections (2)(b) and (2)(c)(ii) been 1.5%; and
2532 (ii) the total amount retained for that month by all sellers at the percentages listed
2533under Subsections (2)(b) and (2)(c)(ii).
2534 (b) The commission shall each month allocate the amount calculated under Subsection 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 83 -
2535(6)(a) to each county, city, and town on the basis of the proportion of agreement sales and use
2536tax that the commission distributes to each county, city, and town for that month compared to
2537the total agreement sales and use tax that the commission distributes for that month to all
2538counties, cities, and towns.
2539 (c) The amount the commission calculates under Subsection (6)(a) may not include an
2540amount collected from a tax that:
2541 (i) the state imposes within a county, city, or town, including the unincorporated area
2542of a county; and
2543 (ii) is not imposed within the entire state.
2544 Section 11. Section 63N-2-502 is amended to read:
2545 63N-2-502. Definitions.
2546 As used in this part:
2547 (1) "Agreement" means an agreement described in Section 63N-2-503.
2548 (2) "Base taxable value" means the value of hotel property before the construction on a
2549qualified hotel begins, as that value is established by the county in which the hotel property is
2550located, using a reasonable valuation method that may include the value of the hotel property
2551on the county assessment rolls the year before the year during which construction on the
2552qualified hotel begins.
2553 (3) "Certified claim" means a claim that the office has approved and certified as
2554provided in Section 63N-2-505.
2555 (4) "Claim" means a written document submitted by a qualified hotel owner or host
2556local government to request a convention incentive.
2557 (5) "Claimant" means the qualified hotel owner or host local government that submits a
2558claim under Subsection 63N-2-505(1)(a) for a convention incentive.
2559 (6) "Commission" means the Utah State Tax Commission.
2560 (7) "Community reinvestment agency" means the same as that term is defined in
2561Section 17C-1-102.
2562 (8) "Construction revenue" means revenue generated from state taxes and local taxes
2563imposed on transactions occurring during the eligibility period as a result of the construction of
2564the hotel property, including purchases made by a qualified hotel owner and its subcontractors.
2565 (9) "Convention incentive" means an incentive for the development of a qualified 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 84 -
2566hotel, in the form of payment from the incentive fund as provided in this part, as authorized in
2567an agreement.
2568 (10) "Eligibility period" means:
2569 (a) the period that:
2570 (i) begins the date construction of a qualified hotel begins; and
2571 (ii) ends:
2572 (A) for purposes of the state portion, 20 years after the date of initial occupancy of that
2573qualified hotel; or
2574 (B) for purposes of the local portion and incremental property tax revenue, 25 years
2575after the date of initial occupancy of that hotel; or
2576 (b) as provided in an agreement between the office and a qualified hotel owner or host
2577local government, a period that:
2578 (i) begins no earlier than the date construction of a qualified hotel begins; and
2579 (ii) is shorter than the period described in Subsection (10)(a).
2580 (11) "Endorsement letter" means a letter:
2581 (a) from the county in which a qualified hotel is located or is proposed to be located;
2582 (b) signed by the county executive; and
2583 (c) expressing the county's endorsement of a developer of a qualified hotel as meeting
2584all the county's criteria for receiving the county's endorsement.
2585 (12) "Host agency" means the community reinvestment agency of the host local
2586government.
2587 (13) "Host local government" means:
2588 (a) a county that enters into an agreement with the office for the construction of a
2589qualified hotel within the unincorporated area of the county; or
2590 (b) a city or town that enters into an agreement with the office for the construction of a
2591qualified hotel within the boundary of the city or town.
2592 (14) "Hotel property" means a qualified hotel and any property that is included in the
2593same development as the qualified hotel, including convention, exhibit, and meeting space,
2594retail shops, restaurants, parking, and other ancillary facilities and amenities.
2595 (15) "Incentive fund" means the Convention Incentive Fund created in Section
259663N-2-503.5. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 85 -
2597 (16) "Incremental property tax revenue" means the amount of property tax revenue
2598generated from hotel property that equals the difference between:
2599 (a) the amount of property tax revenue generated in any tax year by all taxing entities
2600from hotel property, using the current assessed value of the hotel property; and
2601 (b) the amount of property tax revenue that would be generated that tax year by all
2602taxing entities from hotel property, using the hotel property's base taxable value.
2603 (17) "Local portion" means the portion of new tax revenue that is generated by local
2604taxes.
2605 (18) "Local taxes" means a tax imposed under:
2606 (a) Section 59-12-204;
2607 (b) Section 59-12-301;
2608 (c) Sections 59-12-352 and 59-12-353;
2609 (d) Subsection 59-12-603(1)(a); or
2610 (e) Section 59-12-1102.
2611 (19) "New tax revenue" means construction revenue, offsite revenue, and onsite
2612revenue.
2613 (20) "Offsite revenue" means revenue generated from state taxes and local taxes
2614imposed on transactions by a third-party seller occurring other than on hotel property during the
2615eligibility period, if:
2616 (a) the transaction is subject to a tax under Title 59, Chapter 12, Sales and Use Tax
2617Act; and
2618 (b) the third-party seller voluntarily consents to the disclosure of information to the
2619office, as provided in Subsection 63N-2-505(2)(b)(i)(E).
2620 (21) "Onsite revenue" means revenue generated from state taxes and local taxes
2621imposed on transactions occurring on hotel property during the eligibility period.
2622 (22) "Public infrastructure" means:
2623 (a) water, sewer, storm drainage, electrical, telecommunications, and other similar
2624systems and lines;
2625 (b) streets, roads, curbs, gutters, sidewalks, walkways, parking facilities, and public
2626transportation facilities; and
2627 (c) other buildings, facilities, infrastructure, and improvements that benefit the public. 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 86 -
2628 (23) "Qualified hotel" means a full-service hotel development constructed in the state
2629on or after July 1, 2014 that:
2630 (a) requires a significant capital investment;
2631 (b) includes at least 85 square feet of convention, exhibit, and meeting space per guest
2632room; and
2633 (c) is located within 1,000 feet of a convention center that contains at least 500,000
2634square feet of convention, exhibit, and meeting space.
2635 (24) "Qualified hotel owner" means a person who owns a qualified hotel.
2636 (25) "Review committee" means the independent review committee established under
2637Section 63N-2-504.
2638 (26) "Significant capital investment" means an amount of at least $200,000,000.
2639 (27) "State portion" means the portion of new tax revenue that is generated by state
2640taxes.
2641 (28) "State taxes" means a tax imposed under Subsection 59-12-103(2)(a)(i), (2)(b)(i),
2642[(2)(c)(i),] or (2)(e)(i)(A).
2643 (29) "Third-party seller" means a person who is a seller in a transaction:
2644 (a) occurring other than on hotel property;
2645 (b) that is:
2646 (i) the sale, rental, or lease of a room or of convention or exhibit space or other
2647facilities on hotel property; or
2648 (ii) the sale of tangible personal property or a service that is part of a bundled
2649transaction, as defined in Section 59-12-102, with a sale, rental, or lease described in
2650Subsection (29)(b)(i); and
2651 (c) that is subject to a tax under Title 59, Chapter 12, Sales and Use Tax Act.
2652 Section 12. Section 63N-7-301 is amended to read:
2653 63N-7-301. Tourism Marketing Performance Account.
2654 (1) There is created within the General Fund a restricted account known as the Tourism
2655Marketing Performance Account.
2656 (2) The account shall be administered by the tourism office for the purposes listed in
2657Subsections (6) [through (8)] and (7).
2658 (3) (a) The account shall earn interest. 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
- 87 -
2659 (b) All interest earned on account money shall be deposited into the account.
2660 (4) The account shall be funded by appropriations made to the account by the
2661Legislature in accordance with this section.
2662 (5) The managing director shall use account money appropriated to the tourism office
2663to pay for the statewide advertising, marketing, and branding campaign for promotion of the
2664state as conducted by the tourism office.
2665 (6) (a) For each fiscal year, the tourism office shall annually allocate 10% of the
2666account money appropriated to the tourism office to a sports organization for advertising,
2667marketing, branding, and promoting Utah in attracting sporting events into the state.
2668 (b) The sports organization shall:
2669 (i) provide an annual written report to the tourism office that gives an accounting of the
2670use of funds the sports organization receives under this Subsection (6); and
2671 (ii) promote the state and encourage economic growth in the state.
2672 [(7) Money deposited into the account shall include a legislative appropriation from the
2673cumulative sales and use tax revenue increases described in Subsection (8), plus any additional
2674appropriation made by the Legislature.]
2675 [(8) (a) In fiscal years 2006 through 2019, a portion of the state sales and use tax
2676revenues determined under this Subsection (8) shall be certified by the State Tax Commission
2677as a set-aside for the account, and the State Tax Commission shall report the amount of the
2678set-aside to the office, the Office of Legislative Fiscal Analyst, and the Division of Finance,
2679which shall set aside the certified amount for appropriation to the account.]
2680 [(b) For fiscal years 2016 through 2019, the State Tax Commission shall calculate the
2681set-aside under this Subsection (8) in each fiscal year by applying one of the following
2682formulas: if the annual percentage change in the Consumer Price Index for All Urban
2683Consumers, as published by the Bureau of Labor Statistics of the United States Department of
2684Labor, for the fiscal year two years before the fiscal year in which the set-aside is to be made
2685is:]
2686 [(i) greater than 3%, and if the annual percentage change in the state sales and use tax
2687revenues attributable to the retail sales of tourist-oriented goods and services from the fiscal
2688year three years before the fiscal year in which the set-aside is to be made to the fiscal year two
2689years before the fiscal year in which the set-aside is to be made is greater than the annual 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
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2690percentage change in the Consumer Price Index for the fiscal year two years before the fiscal
2691year in which the set-aside is to be made, then the difference between the annual percentage
2692change in the state sales and use tax revenues attributable to the retail sales of tourist-oriented
2693goods and services and the annual percentage change in the Consumer Price Index shall be
2694multiplied by an amount equal to the state sales and use tax revenues attributable to the retail
2695sales of tourist-oriented goods and services from the fiscal year three years before the fiscal
2696year in which the set-aside is to be made; or]
2697 [(ii) 3% or less, and if the annual percentage change in the state sales and use tax
2698revenues attributable to the retail sales of tourist-oriented goods and services from the fiscal
2699year three years before the fiscal year in which the set-aside is to be made to the fiscal year two
2700years before the fiscal year in which the set-aside is to be made is greater than 3%, then the
2701difference between the annual percentage change in the state sales and use tax revenues
2702attributable to the retail sales of tourist-oriented goods and services and 3% shall be multiplied
2703by an amount equal to the state sales and use tax revenues attributable to the retail sales of
2704tourist-oriented goods and services from the fiscal year three years before the fiscal year in
2705which the set-aside is to be made.]
2706 [(c) The total money appropriated to the account in a fiscal year under Subsections
2707(8)(a) and (b) may not exceed the amount appropriated to the account in the preceding fiscal
2708year by more than $3,000,000.]
2709 [(d) As used in this Subsection (8), "state sales and use tax revenues" are revenues
2710collected under Subsections 59-12-103(2)(a)(i)(A) and 59-12-103(2)(c)(i).]
2711 [(e) As used in this Subsection (8), "retail sales of tourist-oriented goods and services"
2712are calculated by adding the following percentages of sales from each business registered with
2713the State Tax Commission under one of the following codes of the 2012 North American
2714Industry Classification System of the federal Executive Office of the President, Office of
2715Management and Budget:]
2716 [(i) 80% of the sales from each business under NAICS Codes:]
2717 [(A) 532111 Passenger Car Rental;]
2718 [(B) 53212 Truck, Utility Trailer, and RV (Recreational Vehicle) Rental and Leasing;]
2719 [(C) 5615 Travel Arrangement and Reservation Services;]
2720 [(D) 7211 Traveler Accommodation; and] 03-01-23 4:26 PM 3rd Sub. (Cherry) H.B. 54
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2721 [(E) 7212 RV (Recreational Vehicle) Parks and Recreational Camps;]
2722 [(ii) 25% of the sales from each business under NAICS Codes:]
2723 [(A) 51213 Motion Picture and Video Exhibition;]
2724 [(B) 532292 Recreational Goods Rental;]
2725 [(C) 711 Performing Arts, Spectator Sports, and Related Industries;]
2726 [(D) 712 Museums, Historical Sites, and Similar Institutions; and]
2727 [(E) 713 Amusement, Gambling, and Recreation Industries;]
2728 [(iii) 20% of the sales from each business under NAICS Code 722 Food Services and
2729Drinking Places;]
2730 [(iv) 18% of the sales from each business under NAICS Codes:]
2731 [(A) 447 Gasoline Stations; and]
2732 [(B) 81293 Parking Lots and Garages;]
2733 [(v) 14% of the sales from each business under NAICS Code 8111 Automotive Repair
2734and Maintenance; and]
2735 [(vi) 5% of the sales from each business under NAICS Codes:]
2736 [(A) 445 Food and Beverage Stores;]
2737 [(B) 446 Health and Personal Care Stores;]
2738 [(C) 448 Clothing and Clothing Accessories Stores;]
2739 [(D) 451 Sporting Goods, Hobby, Musical Instrument, and Book Stores;]
2740 [(E) 452 General Merchandise Stores; and]
2741 [(F) 453 Miscellaneous Store Retailers.]
2742 [(9)] (7) (a) For each fiscal year, the tourism office shall allocate 20% of the funds
2743appropriated to the Tourism Marketing and Performance Account to the cooperative program
2744described in this Subsection [(9)] (7).
2745 (b) Money allocated to the cooperative program may be awarded to cities, counties,
2746nonprofit destination marketing organizations, and similar public entities for the purpose of
2747supplementing money committed by these entities for advertising and promoting sites and
2748events in the state.
2749 (c) The tourism office shall establish:
2750 (i) an application and approval process for an entity to receive a cooperative program
2751award, including an application deadline; 3rd Sub. (Cherry) H.B. 54 03-01-23 4:26 PM
- 90 -
2752 (ii) the criteria for awarding a cooperative program award, which shall emphasize
2753attracting out-of-state visitors, and may include attracting in-state visitors, to sites and events in
2754the state; and
2755 (iii) eligibility, advertising, timing, and reporting requirements of an entity that
2756receives a cooperative program award.
2757 (d) Money allocated to the cooperative program that is not used in each fiscal year shall
2758be returned to the Tourism Marketing Performance Account.
2759 Section 13. Effective date.
2760 (1) Except as provided in Subsection (2), this bill takes effect May 3, 2023.
2761 (2) The changes to Sections 59-12-102, 59-12-103, 59-12-108, 63N-2-502, and
276263N-7-301 take effect January 1, 2025, if the amendment to the Utah Constitution proposed by
2763S.J.R. 10, Proposal to Amend Utah Constitution - Income Tax, 2023 General Session, passes
2764the Legislature and is approved by a majority of those voting on it at the next regular general
2765election.
2766 Section 14. Retrospective operation.
2767 The following sections have retrospective operation for a taxable year beginning on or
2768after January 1, 2023:
2769 (1) Section 59-7-104;
2770 (2) Section 59-7-201;
2771 (3) Section 59-10-104;
2772 (4) Section 59-10-1018;
2773 (5) Section 59-10-1042; and
2774 (6) Section 59-10-1044.