Enrolled Copy H.B. 417
1 MOTOR VEHICLE TAX AMENDMENTS
2 2023 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Phil Lyman
5 Senate Sponsor: Evan J. Vickers
6
7LONG TITLE
8General Description:
9 This bill amends provisions related to the Tourism, Recreation, Cultural, Convention,
10and Airport Facilities Tax Act.
11Highlighted Provisions:
12 This bill:
13 <provides the circumstances under which a county may use the revenue collected
14from a county tax on rental vehicles to mitigate the impacts of tourism; and
15 <makes technical changes.
16Money Appropriated in this Bill:
17 None
18Other Special Clauses:
19 None
20Utah Code Sections Affected:
21AMENDS:
22 17-31-5.5, as last amended by Laws of Utah 2022, Chapter 360
23 59-12-603, as last amended by Laws of Utah 2020, Chapter 407
24
25Be it enacted by the Legislature of the state of Utah:
26 Section 1. Section 17-31-5.5 is amended to read:
27 17-31-5.5. Report by county legislative body -- Content.
28 (1) The legislative body of each county that imposes a transient room tax under Section
2959-12-301 or a tourism, recreation, cultural, convention, and airport facilities tax under Section H.B. 417 Enrolled Copy
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3059-12-603 shall prepare annually a written report in accordance with Subsection (2).
31 (2) The report described in Subsection (1) shall include a breakdown of expenditures
32into the following categories:
33 (a) for the transient room tax, identification of expenditures for:
34 (i) establishing and promoting:
35 (A) recreation;
36 (B) tourism;
37 (C) film production;
38 (D) conventions; and
39 (E) economic diversification activity;
40 (ii) acquiring, leasing, constructing, furnishing, or operating:
41 (A) convention meeting rooms;
42 (B) exhibit halls;
43 (C) visitor information centers;
44 (D) museums; and
45 (E) related facilities;
46 (iii) acquiring or leasing land required for or related to the purposes listed in
47Subsection (2)(a)(ii);
48 (iv) mitigation costs as identified in Subsection 17-31-2(2)(d); and
49 (v) making the annual payment of principal, interest, premiums, and necessary reserves
50for any or the aggregate of bonds issued to pay for costs referred to in Subsections
5117-31-2(2)(e) and (5)(a); and
52 (b) for the tourism, recreation, cultural, convention, and airport facilities tax,
53identification of expenditures for:
54 (i) financing tourism promotion, which means an activity to develop, encourage,
55solicit, or market tourism that attracts transient guests to the county, including planning,
56product development, and advertising;
57 (ii) the development, operation, and maintenance of the following facilities as defined Enrolled Copy H.B. 417
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58in Section 59-12-602:
59 (A) an airport facility;
60 (B) a convention facility;
61 (C) a cultural facility;
62 (D) a recreation facility; and
63 (E) a tourist facility; [and]
64 (iii) mitigation costs as identified in Subsection 59-12-603(2)(b); and
65 [(iii)] (iv) a pledge as security for evidences of indebtedness under Subsection
6659-12-603(3).
67 (3) For the transient room tax, the report described in Subsection (1) shall include a
68breakdown of each expenditure described in Subsection (2)(a)(i), including:
69 (a) whether the expenditure was used for in-state and out-of-state promotion efforts;
70 (b) an explanation of how the expenditure targeted a cost created by tourism; and
71 (c) an accounting of the expenditure showing that the expenditure was used only for
72costs directly related to a cost created by tourism.
73 (4) On or before October 1, the county legislative body shall provide a copy of the
74annual written report described in Subsection (1) for the previous fiscal year to:
75 (a) the Utah Office of Tourism within the Governor's Office of Economic Opportunity;
76 (b) the county's tourism tax advisory board; and
77 (c) the Office of the Legislative Fiscal Analyst.
78 Section 2. Section 59-12-603 is amended to read:
79 59-12-603. County tax -- Bases -- Rates -- Use of revenue -- Adoption of ordinance
80required -- Advisory board -- Administration -- Collection -- Administrative charge --
81Distribution -- Enactment or repeal of tax or tax rate change -- Effective date -- Notice
82requirements.
83 (1) (a) In addition to any other taxes, a county legislative body may, as provided in this
84part, impose a tax as follows:
85 (i) (A) a county legislative body of any county may impose a tax of not to exceed 3% H.B. 417 Enrolled Copy
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86on all short-term rentals of motor vehicles, except for short-term rentals of motor vehicles
87made for the purpose of temporarily replacing a person's motor vehicle that is being repaired
88pursuant to a repair or an insurance agreement; and
89 (B) a county legislative body of any county imposing a tax under Subsection
90(1)(a)(i)(A) may, in addition to imposing the tax under Subsection (1)(a)(i)(A), impose a tax of
91not to exceed 4% on all short-term rentals of motor vehicles, except for short-term rentals of
92motor vehicles made for the purpose of temporarily replacing a person's motor vehicle that is
93being repaired pursuant to a repair or an insurance agreement;
94 (ii) [beginning on January 1, 2021,] a county legislative body of any county may
95impose a tax of not to exceed 7% on all short-term rentals of off-highway vehicles and
96recreational vehicles;
97 (iii) a county legislative body of any county may impose a tax of not to exceed 1% of
98all sales of the following that are sold by a restaurant:
99 (A) alcoholic beverages;
100 (B) food and food ingredients; or
101 (C) prepared food; and
102 (iv) a county legislative body of a county of the first class may impose a tax of not to
103exceed .5% on charges for the accommodations and services described in Subsection
10459-12-103(1)(i).
105 (b) A tax imposed under Subsection (1)(a) is subject to the audit provisions of Section
10617-31-5.5.
107 (2) (a) Subject to Subsection [(2)(b)] (2)(c), a county may use revenue from the
108imposition of a tax under Subsection (1) for:
109 (i) financing tourism promotion; and
110 (ii) the development, operation, and maintenance of:
111 (A) an airport facility;
112 (B) a convention facility;
113 (C) a cultural facility; Enrolled Copy H.B. 417
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114 (D) a recreation facility; or
115 (E) a tourist facility.
116 (b) (i) In addition to the uses described in Subsection (2)(a) and subject to Subsection
117(2)(b)(ii), a county of the fourth, fifth, or sixth class or a county with a population density of
118fewer than 15 people per square mile may expend the revenue from the imposition of a tax
119under Subsections (1)(a)(i) and (ii) on the following activities to mitigate the impacts of
120tourism:
121 (A) solid waste disposal;
122 (B) search and rescue activities;
123 (C) law enforcement activities;
124 (D) emergency medical services; or
125 (E) fire protection services.
126 (ii) A county may only expend the revenue as outlined in Subsection (2)(b)(i) if the
127county's tourism tax advisory board created under Subsection 17-31-8(1)(a) has prioritized the
128use of revenue to mitigate the impacts of tourism.
129 (c) A county of the first class shall expend at least $450,000 each year of the revenue
130from the imposition of a tax authorized by Subsection (1)(a)(iv) within the county to fund a
131marketing and ticketing system designed to:
132 (i) promote tourism in ski areas within the county by persons that do not reside within
133the state; and
134 (ii) combine the sale of:
135 (A) ski lift tickets; and
136 (B) accommodations and services described in Subsection 59-12-103(1)(i).
137 (3) A tax imposed under this part may be pledged as security for bonds, notes, or other
138evidences of indebtedness incurred by a county, city, or town under Title 11, Chapter 14, Local
139Government Bonding Act, or a community reinvestment agency under Title 17C, Chapter 1,
140Part 5, Agency Bonds, to finance:
141 (a) an airport facility; H.B. 417 Enrolled Copy
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142 (b) a convention facility;
143 (c) a cultural facility;
144 (d) a recreation facility; or
145 (e) a tourist facility.
146 (4) (a) To impose a tax under Subsection (1), the county legislative body shall adopt an
147ordinance imposing the tax.
148 (b) The ordinance under Subsection (4)(a) shall include provisions substantially the
149same as those contained in Part 1, Tax Collection, except that the tax shall be imposed only on
150those items and sales described in Subsection (1).
151 (c) The name of the county as the taxing agency shall be substituted for that of the state
152where necessary, and an additional license is not required if one has been or is issued under
153Section 59-12-106.
154 (5) To maintain in effect a tax ordinance adopted under this part, each county
155legislative body shall, within 30 days of any amendment of any applicable provisions of Part 1,
156Tax Collection, adopt amendments to the county's tax ordinance to conform with the applicable
157amendments to Part 1, Tax Collection.
158 (6) (a) Regardless of whether a county of the first class creates a tourism tax advisory
159board in accordance with Section 17-31-8, the county legislative body of the county of the first
160class shall create a tax advisory board in accordance with this Subsection (6).
161 (b) The tax advisory board shall be composed of nine members appointed as follows:
162 (i) four members shall be residents of a county of the first class appointed by the
163county legislative body of the county of the first class; and
164 (ii) subject to Subsections (6)(c) and (d), five members shall be mayors of cities or
165towns within the county of the first class appointed by an organization representing all mayors
166of cities and towns within the county of the first class.
167 (c) Five members of the tax advisory board constitute a quorum.
168 (d) The county legislative body of the county of the first class shall determine:
169 (i) terms of the members of the tax advisory board; Enrolled Copy H.B. 417
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170 (ii) procedures and requirements for removing a member of the tax advisory board;
171 (iii) voting requirements, except that action of the tax advisory board shall be by at
172least a majority vote of a quorum of the tax advisory board;
173 (iv) chairs or other officers of the tax advisory board;
174 (v) how meetings are to be called and the frequency of meetings; and
175 (vi) the compensation, if any, of members of the tax advisory board.
176 (e) The tax advisory board under this Subsection (6) shall advise the county legislative
177body of the county of the first class on the expenditure of revenue collected within the county
178of the first class from the taxes described in Subsection (1)(a).
179 (7) (a) (i) Except as provided in Subsection (7)(a)(ii), a tax authorized under this part
180shall be administered, collected, and enforced in accordance with:
181 (A) the same procedures used to administer, collect, and enforce the tax under:
182 (I) Part 1, Tax Collection; or
183 (II) Part 2, Local Sales and Use Tax Act; and
184 (B) Chapter 1, General Taxation Policies.
185 (ii) A tax under this part is not subject to Section 59-12-107.1 or 59-12-123 or
186Subsections 59-12-205(2) through (6).
187 (b) Except as provided in Subsection (7)(c):
188 (i) for a tax under this part other than the tax under Subsection (1)(a)(i)(B), the
189commission shall distribute the revenue to the county imposing the tax; and
190 (ii) for a tax under Subsection (1)(a)(i)(B), the commission shall distribute the revenue
191according to the distribution formula provided in Subsection (8).
192 (c) The commission shall retain and deposit an administrative charge in accordance
193with Section 59-1-306 from the revenue the commission collects from a tax under this part.
194 (8) The commission shall distribute the revenue generated by the tax under Subsection
195(1)(a)(i)(B) to each county collecting a tax under Subsection (1)(a)(i)(B) according to the
196following formula:
197 (a) the commission shall distribute 70% of the revenue based on the percentages H.B. 417 Enrolled Copy
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198generated by dividing the revenue collected by each county under Subsection (1)(a)(i)(B) by
199the total revenue collected by all counties under Subsection (1)(a)(i)(B); and
200 (b) the commission shall distribute 30% of the revenue based on the percentages
201generated by dividing the population of each county collecting a tax under Subsection
202(1)(a)(i)(B) by the total population of all counties collecting a tax under Subsection (1)(a)(i)(B).
203 (9) (a) For purposes of this Subsection (9):
204 (i) "Annexation" means an annexation to a county under Title 17, Chapter 2, Part 2,
205County Annexation.
206 (ii) "Annexing area" means an area that is annexed into a county.
207 (b) (i) Except as provided in Subsection (9)(c), if a county enacts or repeals a tax or
208changes the rate of a tax under this part, the enactment, repeal, or change shall take effect:
209 (A) on the first day of a calendar quarter; and
210 (B) after a 90-day period beginning on the day on which the commission receives
211notice meeting the requirements of Subsection (9)(b)(ii) from the county.
212 (ii) The notice described in Subsection (9)(b)(i)(B) shall state:
213 (A) that the county will enact or repeal a tax or change the rate of a tax under this part;
214 (B) the statutory authority for the tax described in Subsection (9)(b)(ii)(A);
215 (C) the effective date of the tax described in Subsection (9)(b)(ii)(A); and
216 (D) if the county enacts the tax or changes the rate of the tax described in Subsection
217(9)(b)(ii)(A), the rate of the tax.
218 (c) (i) If the billing period for a transaction begins before the effective date of the
219enactment of the tax or the tax rate increase imposed under Subsection (1), the enactment of
220the tax or the tax rate increase shall take effect on the first day of the first billing period that
221begins after the effective date of the enactment of the tax or the tax rate increase.
222 (ii) If the billing period for a transaction begins before the effective date of the repeal
223of the tax or the tax rate decrease imposed under Subsection (1), the repeal of the tax or the tax
224rate decrease shall take effect on the first day of the last billing period that began before the
225effective date of the repeal of the tax or the tax rate decrease. Enrolled Copy H.B. 417
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226 (d) (i) Except as provided in Subsection (9)(e), if the annexation will result in the
227enactment, repeal, or change in the rate of a tax under this part for an annexing area, the
228enactment, repeal, or change shall take effect:
229 (A) on the first day of a calendar quarter; and
230 (B) after a 90-day period beginning on the day on which the commission receives
231notice meeting the requirements of Subsection (9)(d)(ii) from the county that annexes the
232annexing area.
233 (ii) The notice described in Subsection (9)(d)(i)(B) shall state:
234 (A) that the annexation described in Subsection (9)(d)(i) will result in an enactment,
235repeal, or change in the rate of a tax under this part for the annexing area;
236 (B) the statutory authority for the tax described in Subsection (9)(d)(ii)(A);
237 (C) the effective date of the tax described in Subsection (9)(d)(ii)(A); and
238 (D) if the county enacts the tax or changes the rate of the tax described in Subsection
239(9)(d)(ii)(A), the rate of the tax.
240 (e) (i) If the billing period for a transaction begins before the effective date of the
241enactment of the tax or the tax rate increase imposed under Subsection (1), the enactment of
242the tax or the tax rate increase shall take effect on the first day of the first billing period that
243begins after the effective date of the enactment of the tax or the tax rate increase.
244 (ii) If the billing period for a transaction begins before the effective date of the repeal
245of the tax or the tax rate decrease imposed under Subsection (1), the repeal of the tax or the tax
246rate decrease shall take effect on the first day of the last billing period that began before the
247effective date of the repeal of the tax or the tax rate decrease.