03-03 14:01 3rd Sub. (Cherry) H.B. 509
Jennifer Dailey-Provost proposes the following substitute bill:
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Specialized Product Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jennifer Dailey-Provost
Senate Sponsor: Evan J. Vickers
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LONG TITLE
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General Description:
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This bill amends provisions related to specialized products.
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Highlighted Provisions:
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This bill:
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▸ defines terms;
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▸ modifies the requirements to sell a kratom product in the state;
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▸ renames the "Cannabinoid Proceeds Restricted Account" to the "Specialized Product
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Proceeds Restricted Account";
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▸ modifies provisions related to the tax on cannabinoid products; and
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▸ applies a tax to kratom products that can be used for enforcement and other statutory
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required duties.
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Money Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill provides a special effective date.
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Utah Code Sections Affected:
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AMENDS:
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4-45-102 (Effective 05/07/25), as enacted by Laws of Utah 2019, Chapter 329
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4-45-104 (Effective 05/07/25), as enacted by Laws of Utah 2019, Chapter 329
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4-45-108 (Effective 01/01/26), as enacted by Laws of Utah 2019, Chapter 329
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59-1-306 (Effective 01/01/26), as last amended by Laws of Utah 2024, Chapter 35
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59-1-403 (Effective 01/01/26), as last amended by Laws of Utah 2024, Chapters 25, 35
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59-12-104 (Effective 01/01/26), as last amended by Laws of Utah 2024, Chapter 35
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59-31-101 (Effective 01/01/26), as enacted by Laws of Utah 2024, Chapter 35
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59-31-201 (Effective 01/01/26), as enacted by Laws of Utah 2024, Chapter 35
3rd Sub. H.B. 509 3rd Sub. (Cherry) H.B. 509 03-03 14:01
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59-31-202 (Effective 01/01/26), as enacted by Laws of Utah 2024, Chapter 35
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59-31-301 (Effective 01/01/26), as enacted by Laws of Utah 2024, Chapter 35
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59-31-302 (Effective 01/01/26), as enacted by Laws of Utah 2024, Chapter 35
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59-31-401 (Effective 01/01/26), as enacted by Laws of Utah 2024, Chapter 35
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59-31-402 (Effective 01/01/26), as enacted by Laws of Utah 2024, Chapter 35
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Be it enacted by the Legislature of the state of Utah:
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Section 1. Section 4-45-102 is amended to read:
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4-45-102 (Effective 05/07/25). Definitions.
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As used in this chapter:
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[(1) "Commissioner" means the commissioner of the department.]
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[(2) "Department" means the Department of Agriculture and Food created in Section
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4-2-102.]
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[(3)] (1) "Food" means:
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(a) an article used for food or drink for human or animal consumption or the components
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of the article;
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(b) chewing gum or chewing gum components; or
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(c) a food supplement for special dietary use that is necessitated because of a physical,
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physiological, pathological, or other condition.
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[(4)] (2) "Kratom processor" means a person who:
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(a) sells, prepares, or maintains a kratom product; or
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(b) advertises, represents, or holds oneself out as selling, preparing, or maintaining a
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kratom product.
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[(5)] (3) "Kratom product" [mean] means food containing any part of a leaf of the plant
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Mitragyna speciosa.
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Section 2. Section 4-45-104 is amended to read:
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4-45-104 (Effective 05/07/25). Kratom processor requirements -- Criminal
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penalty.
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(1) A kratom processor may not prepare, distribute, sell, or offer for sale a kratom product:
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(a) that is mixed or packed with a nonkratom substance that affects the quality or
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strength of the kratom product to such a degree as to render the kratom product
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injurious to a consumer;
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(b) that contains a poisonous or [otherwise] potentially deleterious nonkratom ingredient,
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including a controlled substance as defined in Section 58-37-2;
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(c) containing a level of 7-hydroxymitragynine in the alkaloid fraction that is greater
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than 2% of the alkaloid composition of the kratom product;
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(d) containing a synthetic alkaloid, including synthetic mitragynine, synthetic
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7-hydroxymitragynine, or any other synthetically derived compound of the kratom
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plant; or
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(e) that does not include a product label on the kratom product packaging that states the
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amount of mitragynine and 7-hydroxymitragynine contained in the packaged kratom
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product.
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(2) A kratom processor who violates Subsection (1) is guilty of a class C misdemeanor for
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each violation.
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(3) A kratom processor does not violate Subsection (1) if the kratom processor shows by a
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preponderance of the evidence that the kratom processor relied in good faith upon the
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representation of a manufacturer, processor, packer, or distributor of food represented to
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be a kratom product.
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(4) A kratom processor may not prepare, distribute, sell, or offer for sale a kratom product
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that is not registered with the department in accordance with this chapter.
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(5) A kratom processor shall register as a food establishment in accordance with Section
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4-5-301.
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Section 3. Section 4-45-108 is amended to read:
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4-45-108 (Effective 01/01/26). Registration of kratom products -- Department
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duties.
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(1) The department shall [set a fee to ]register a kratom product, in accordance with Section
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4-2-103.
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[(2) The fee described in Subsection (1) may be paid by a producer, manufacturer, or
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distributor of a kratom product, but a kratom product may not be registered with the
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department until the fee is paid.]
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[(3)] (2) The department shall:
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(a) set an administrative fine[, larger than the fee described in Subsection (1), ] not to
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exceed $5,000 for a person who sells a kratom product that is not registered with the
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department; and
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(b) assess the fine described in Subsection [(3)(a)] (2)(a) against any person who offers
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an unregistered kratom product for sale in this state or take another administrative
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action.
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[(4)] (3) The department may seize and destroy any unregistered kratom product offered for
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sale in this state.
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(4) The department shall share information regarding persons that sell kratom products the
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department has obtained through implementation and enforcement of this chapter with
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the State Tax Commission upon request.
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Section 4. Section 59-1-306 is amended to read:
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59-1-306 (Effective 01/01/26). Definition -- State Tax Commission
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Administrative Charge Account -- Amount of administrative charge -- Deposit of
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revenue into the restricted account -- Interest deposited into General Fund --
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Expenditure of money deposited into the restricted account.
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(1) As used in this section, "qualifying tax, fee, or charge" means a tax, fee, or charge the
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commission administers under:
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(a) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
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(b) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
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(c) Section 19-6-714;
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(d) Section 19-6-805;
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(e) Chapter 12, Sales and Use Tax Act, other than a tax under Chapter 12, Part 1, Tax
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Collection, or Chapter 12, Part 18, Additional State Sales and Use Tax Act;
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(f) Section 59-27-105;
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(g) Chapter 31, [Cannabinoid] Specialized Product Licensing and Tax Act;
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(h) Section 63H-1-205; or
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(i) Title 69, Chapter 2, Part 4, Prepaid Wireless Telecommunications Service Charges.
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(2) There is created a restricted account within the General Fund known as the "State Tax
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Commission Administrative Charge Account."
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(3) Subject to the other provisions of this section, the restricted account shall consist of
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administrative charges the commission retains and deposits in accordance with this
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section.
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(4) For purposes of this section, the administrative charge is a percentage of revenue the
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commission collects from each qualifying tax, fee, or charge of not to exceed the lesser
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of:
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(a) 1.5%; or
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(b) an equal percentage of revenue the commission collects from each qualifying tax,
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fee, or charge sufficient to cover the cost to the commission of administering the
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qualifying taxes, fees, or charges.
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(5) The commission shall deposit an administrative charge into the restricted account.
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(6) Interest earned on the restricted account shall be deposited into the General Fund.
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(7) The commission shall expend money appropriated by the Legislature to the commission
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from the restricted account to administer qualifying taxes, fees, or charges.
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Section 5. Section 59-1-403 is amended to read:
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59-1-403 (Effective 01/01/26). Confidentiality -- Exceptions -- Penalty --
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Application to property tax.
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(1) As used in this section:
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(a) "Distributed tax, fee, or charge" means a tax, fee, or charge:
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(i) the commission administers under:
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(A) this title, other than a tax under Chapter 12, Part 2, Local Sales and Use Tax
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Act;
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(B) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
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(C) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
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(D) Section 19-6-805;
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(E) Section 63H-1-205; or
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(F) Title 69, Chapter 2, Part 4, Prepaid Wireless Telecommunications Service
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Charges; and
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(ii) with respect to which the commission distributes the revenue collected from the
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tax, fee, or charge to a qualifying jurisdiction.
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(b) "Qualifying jurisdiction" means:
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(i) a county, city, or town;
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(ii) the military installation development authority created in Section 63H-1-201; or
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(iii) the Utah Inland Port Authority created in Section 11-58-201.
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(2)(a) Any of the following may not divulge or make known in any manner any
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information gained by that person from any return filed with the commission:
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(i) a tax commissioner;
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(ii) an agent, clerk, or other officer or employee of the commission; or
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(iii) a representative, agent, clerk, or other officer or employee of any county, city, or
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town.
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(b) An official charged with the custody of a return filed with the commission is not
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required to produce the return or evidence of anything contained in the return in any
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action or proceeding in any court, except:
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(i) in accordance with judicial order;
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(ii) on behalf of the commission in any action or proceeding under:
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(A) this title; or
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(B) other law under which persons are required to file returns with the
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commission;
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(iii) on behalf of the commission in any action or proceeding to which the
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commission is a party; or
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(iv) on behalf of any party to any action or proceeding under this title if the report or
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facts shown by the return are directly involved in the action or proceeding.
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(c) Notwithstanding Subsection (2)(b), a court may require the production of, and may
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admit in evidence, any portion of a return or of the facts shown by the return, as are
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specifically pertinent to the action or proceeding.
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(3) This section does not prohibit:
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(a) a person or that person's duly authorized representative from receiving a copy of any
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return or report filed in connection with that person's own tax;
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(b) the publication of statistics as long as the statistics are classified to prevent the
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identification of particular reports or returns; and
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(c) the inspection by the attorney general or other legal representative of the state of the
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report or return of any taxpayer:
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(i) who brings action to set aside or review a tax based on the report or return;
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(ii) against whom an action or proceeding is contemplated or has been instituted
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under this title; or
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(iii) against whom the state has an unsatisfied money judgment.
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(4)(a) Notwithstanding Subsection (2) and for purposes of administration, the
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commission may by rule, made in accordance with Title 63G, Chapter 3, Utah
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Administrative Rulemaking Act, provide for a reciprocal exchange of information
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with:
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(i) the United States Internal Revenue Service; or
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(ii) the revenue service of any other state.
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(b) Notwithstanding Subsection (2) and for all taxes except individual income tax and
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corporate franchise tax, the commission may by rule, made in accordance with Title
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63G, Chapter 3, Utah Administrative Rulemaking Act, share information gathered
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from returns and other written statements with the federal government, any other
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state, any of the political subdivisions of another state, or any political subdivision of
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this state, except as limited by Sections 59-12-209 and 59-12-210, if the political
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subdivision, other state, or the federal government grant substantially similar
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privileges to this state.
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(c) Notwithstanding Subsection (2) and for all taxes except individual income tax and
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corporate franchise tax, the commission may by rule, in accordance with Title 63G,
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Chapter 3, Utah Administrative Rulemaking Act, provide for the issuance of
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information concerning the identity and other information of taxpayers who have
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failed to file tax returns or to pay any tax due.
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(d) Notwithstanding Subsection (2), the commission shall provide to the director of the
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Division of Environmental Response and Remediation, as defined in Section
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19-6-402, as requested by the director of the Division of Environmental Response
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and Remediation, any records, returns, or other information filed with the
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commission under Chapter 13, Motor and Special Fuel Tax Act, or Section
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19-6-410.5 regarding the environmental assurance program participation fee.
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(e) Notwithstanding Subsection (2), at the request of any person the commission shall
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provide that person sales and purchase volume data reported to the commission on a
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report, return, or other information filed with the commission under:
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(i) Chapter 13, Part 2, Motor Fuel; or
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(ii) Chapter 13, Part 4, Aviation Fuel.
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(f) Notwithstanding Subsection (2), upon request from a tobacco product manufacturer,
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as defined in Section 59-22-202, the commission shall report to the manufacturer:
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(i) the quantity of cigarettes, as defined in Section 59-22-202, produced by the
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manufacturer and reported to the commission for the previous calendar year under
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Section 59-14-407; and
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(ii) the quantity of cigarettes, as defined in Section 59-22-202, produced by the
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manufacturer for which a tax refund was granted during the previous calendar
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year under Section 59-14-401 and reported to the commission under Subsection
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59-14-401(1)(a)(v).
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(g) Notwithstanding Subsection (2), the commission shall notify manufacturers,
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distributors, wholesalers, and retail dealers of a tobacco product manufacturer that is
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prohibited from selling cigarettes to consumers within the state under Subsection
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59-14-210(2).
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(h) Notwithstanding Subsection (2), the commission may:
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(i) provide to the Division of Consumer Protection within the Department of
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Commerce and the attorney general data:
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(A) reported to the commission under Section 59-14-212; or
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(B) related to a violation under Section 59-14-211; and
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(ii) upon request, provide to any person data reported to the commission under
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Subsections 59-14-212(1)(a) through (c) and Subsection 59-14-212(1)(g).
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(i) Notwithstanding Subsection (2), the commission shall, at the request of a committee
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of the Legislature, the Office of the Legislative Fiscal Analyst, or the Governor's
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Office of Planning and Budget, provide to the committee or office the total amount of
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revenues collected by the commission under Chapter 24, Radioactive Waste Facility
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Tax Act, for the time period specified by the committee or office.
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(j) Notwithstanding Subsection (2), the commission shall make the directory required by
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Section 59-14-603 available for public inspection.
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(k) Notwithstanding Subsection (2), the commission may share information with federal,
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state, or local agencies as provided in Subsection 59-14-606(3).
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(l)(i) Notwithstanding Subsection (2), the commission shall provide the Office of
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Recovery Services within the Department of Health and Human Services any
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relevant information obtained from a return filed under Chapter 10, Individual
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Income Tax Act, regarding a taxpayer who has become obligated to the Office of
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Recovery Services.
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(ii) The information described in Subsection (4)(l)(i) may be provided by the Office
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of Recovery Services to any other state's child support collection agency involved
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in enforcing that support obligation.
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(m)(i) Notwithstanding Subsection (2), upon request from the state court
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administrator, the commission shall provide to the state court administrator, the
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name, address, telephone number, county of residence, and social security number
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on resident returns filed under Chapter 10, Individual Income Tax Act.
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(ii) The state court administrator may use the information described in Subsection
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(4)(m)(i) only as a source list for the master jury list described in Section
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78B-1-106.
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(n)(i) As used in this Subsection (4)(n):
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(A) "GOEO" means the Governor's Office of Economic Opportunity created in
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Section 63N-1a-301.
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(B) "Income tax information" means information gained by the commission that is
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required to be attached to or included in a return filed with the commission
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under Chapter 7, Corporate Franchise and Income Taxes, or Chapter 10,
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Individual Income Tax Act.
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(C) "Other tax information" means information gained by the commission that is
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required to be attached to or included in a return filed with the commission
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except for a return filed under Chapter 7, Corporate Franchise and Income
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Taxes, or Chapter 10, Individual Income Tax Act.
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(D) "Tax information" means income tax information or other tax information.
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(ii)(A) Notwithstanding Subsection (2) and except as provided in Subsection
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(4)(n)(ii)(B) or (C), the commission shall at the request of GOEO provide to
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GOEO all income tax information.
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(B) For purposes of a request for income tax information made under Subsection
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(4)(n)(ii)(A), GOEO may not request and the commission may not provide to
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GOEO a person's address, name, social security number, or taxpayer
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identification number.
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(C) In providing income tax information to GOEO, the commission shall in all
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instances protect the privacy of a person as required by Subsection (4)(n)(ii)(B).
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(iii)(A) Notwithstanding Subsection (2) and except as provided in Subsection
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(4)(n)(iii)(B), the commission shall at the request of GOEO provide to GOEO
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other tax information.
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(B) Before providing other tax information to GOEO, the commission shall redact
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or remove any name, address, social security number, or taxpayer identification
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number.
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(iv) GOEO may provide tax information received from the commission in accordance
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with this Subsection (4)(n) only:
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(A) as a fiscal estimate, fiscal note information, or statistical information; and
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(B) if the tax information is classified to prevent the identification of a particular
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return.
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(v)(A) A person may not request tax information from GOEO under Title 63G,
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Chapter 2, Government Records Access and Management Act, or this section,
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if GOEO received the tax information from the commission in accordance with
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this Subsection (4)(n).
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(B) GOEO may not provide to a person that requests tax information in
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accordance with Subsection (4)(n)(v)(A) any tax information other than the tax
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information GOEO provides in accordance with Subsection (4)(n)(iv).
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(o) Notwithstanding Subsection (2), the commission may provide to the governing board
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of the agreement or a taxing official of another state, the District of Columbia, the
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United States, or a territory of the United States:
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(i) the following relating to an agreement sales and use tax:
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(A) information contained in a return filed with the commission;
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(B) information contained in a report filed with the commission;
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(C) a schedule related to Subsection (4)(o)(i)(A) or (B); or
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(D) a document filed with the commission; or
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(ii) a report of an audit or investigation made with respect to an agreement sales and
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use tax.
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(p) Notwithstanding Subsection (2), the commission may provide information
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concerning a taxpayer's state income tax return or state income tax withholding
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information to the Driver License Division if the Driver License Division:
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(i) requests the information; and
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(ii) provides the commission with a signed release form from the taxpayer allowing
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the Driver License Division access to the information.
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(q) Notwithstanding Subsection (2), the commission shall provide to the Utah
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Communications Authority, or a division of the Utah Communications Authority, the
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information requested by the authority under Sections 63H-7a-302, 63H-7a-402, and
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63H-7a-502.
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(r) Notwithstanding Subsection (2), the commission shall provide to the Utah
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Educational Savings Plan information related to a resident or nonresident individual's
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contribution to a Utah Educational Savings Plan account as designated on the
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resident or nonresident's individual income tax return as provided under Section
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59-10-1313.
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(s) Notwithstanding Subsection (2), for the purpose of verifying eligibility under
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Sections 26B-3-106 and 26B-3-903, the commission shall provide an eligibility
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worker with the Department of Health and Human Services or its designee with the
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adjusted gross income of an individual if:
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(i) an eligibility worker with the Department of Health and Human Services or its
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designee requests the information from the commission; and
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(ii) the eligibility worker has complied with the identity verification and consent
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provisions of Sections 26B-3-106 and 26B-3-903.
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(t) Notwithstanding Subsection (2), the commission may provide to a county, as
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determined by the commission, information declared on an individual income tax
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return in accordance with Section 59-10-103.1 that relates to eligibility to claim a
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residential exemption authorized under Section 59-2-103.
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(u) Notwithstanding Subsection (2), the commission shall provide a report regarding any
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access line provider that is over 90 days delinquent in payment to the commission of
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amounts the access line provider owes under Title 69, Chapter 2, Part 4, Prepaid
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Wireless Telecommunications Service Charges, to the board of the Utah
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Communications Authority created in Section 63H-7a-201.
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(v) Notwithstanding Subsection (2), the commission shall provide the Department of
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Environmental Quality a report on the amount of tax paid by a radioactive waste
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facility for the previous calendar year under Section 59-24-103.5.
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(w) Notwithstanding Subsection (2), the commission may, upon request, provide to the
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Department of Workforce Services any information received under Chapter 10, Part
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4, Withholding of Tax, that is relevant to the duties of the Department of Workforce
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Services.
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(x) Notwithstanding Subsection (2), the commission may provide the Public Service
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Commission or the Division of Public Utilities information related to a seller that
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collects and remits to the commission a charge described in Subsection 69-2-405(2),
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including the seller's identity and the number of charges described in Subsection
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69-2-405(2) that the seller collects.
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(y)(i) Notwithstanding Subsection (2), the commission shall provide to each
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qualifying jurisdiction the collection data necessary to verify the revenue collected
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by the commission for a distributed tax, fee, or charge collected within the
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qualifying jurisdiction.
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(ii) In addition to the information provided under Subsection (4)(y)(i), the
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commission shall provide a qualifying jurisdiction with copies of returns and other
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information relating to a distributed tax, fee, or charge collected within the
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qualifying jurisdiction.
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(iii)(A) To obtain the information described in Subsection (4)(y)(ii), the chief
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executive officer or the chief executive officer's designee of the qualifying
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jurisdiction shall submit a written request to the commission that states the
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specific information sought and how the qualifying jurisdiction intends to use
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the information.
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(B) The information described in Subsection (4)(y)(ii) is available only in official
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matters of the qualifying jurisdiction.
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(iv) Information that a qualifying jurisdiction receives in response to a request under
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this subsection is:
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(A) classified as a private record under Title 63G, Chapter 2, Government Records
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Access and Management Act; and
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(B) subject to the confidentiality requirements of this section.
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(z) Notwithstanding Subsection (2), the commission shall provide the Alcoholic
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Beverage Services Commission, upon request, with taxpayer status information
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related to state tax obligations necessary to comply with the requirements described
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in Section 32B-1-203.
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(aa) Notwithstanding Subsection (2), the commission shall inform the Department of
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Workforce Services, as soon as practicable, whether an individual claimed and is
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entitled to claim a federal earned income tax credit for the year requested by the
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Department of Workforce Services if:
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(i) the Department of Workforce Services requests this information; and
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(ii) the commission has received the information release described in Section
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35A-9-604.
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(bb)(i) As used in this Subsection (4)(bb), "unclaimed property administrator" means
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the administrator or the administrator's agent, as those terms are defined in Section
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67-4a-102.
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(ii)(A) Notwithstanding Subsection (2), upon request from the unclaimed property
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administrator and to the extent allowed under federal law, the commission shall
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provide the unclaimed property administrator the name, address, telephone
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number, county of residence, and social security number or federal employer
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identification number on any return filed under Chapter 7, Corporate Franchise
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and Income Taxes, or Chapter 10, Individual Income Tax Act.
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(B) The unclaimed property administrator may use the information described in
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Subsection (4)(bb)(ii)(A) only for the purpose of returning unclaimed property
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to the property's owner in accordance with Title 67, Chapter 4a, Revised
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Uniform Unclaimed Property Act.
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(iii) The unclaimed property administrator is subject to the confidentiality provisions
398
of this section with respect to any information the unclaimed property
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administrator receives under this Subsection (4)(bb).
400
(cc) Notwithstanding Subsection (2), the commission may, upon request, disclose a
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taxpayer's state individual income tax information to a program manager of the Utah
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Fits All Scholarship Program under Section 53F-6-402 if:
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(i) the taxpayer consents in writing to the disclosure;
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(ii) the taxpayer's written consent includes the taxpayer's name, social security
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number, and any other information the commission requests that is necessary to
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verify the identity of the taxpayer; and
407
(iii) the program manager provides the taxpayer's written consent to the commission.
408
(dd) Notwithstanding Subsection (2), the commission may provide to the Division of
409
Finance within the Department of Government Operations any information necessary
410
to facilitate a payment from the commission to a taxpayer, including:
411
(i) the name of the taxpayer entitled to the payment or any other person legally
412
authorized to receive the payment;
413
(ii) the taxpayer identification number of the taxpayer entitled to the payment;
414
(iii) the payment identification number and amount of the payment;
415
(iv) the tax year to which the payment applies and date on which the payment is due;
416
(v) a mailing address to which the payment may be directed; and
417
(vi) information regarding an account at a depository institution to which the
418
payment may be directed, including the name of the depository institution, the
419
type of account, the account number, and the routing number for the account.
420
(ee) Notwithstanding Subsection (2), the commission shall provide the total amount of
421
revenues collected by the commission under Subsection 59-5-202(5):
422
(i) at the request of a committee of the Legislature, the Office of the Legislative
423
Fiscal Analyst, or the Governor's Office of Planning and Budget, to the committee
424
or office for the time period specified by the committee or office; and
425
(ii) to the Division of Finance for purposes of the Division of Finance administering
426
Subsection 59-5-202(5).
427
(ff) Notwithstanding Subsection (2), the commission may provide the Department of
428
Agriculture and Food with information from a return filed in accordance with
429
Chapter 31, [Cannabinoid] Specialized Product Licensing and Tax Act.
430
(5)(a) Each report and return shall be preserved for at least three years.
431
(b) After the three-year period provided in Subsection (5)(a) the commission may
432
destroy a report or return.
433
(6)(a) Any individual who violates this section is guilty of a class A misdemeanor.
434
(b) If the individual described in Subsection (6)(a) is an officer or employee of the state,
435
the individual shall be dismissed from office and be disqualified from holding public
436
office in this state for a period of five years thereafter.
- 13 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
437
(c) Notwithstanding Subsection (6)(a) or (b), GOEO, when requesting information in
438
accordance with Subsection (4)(n)(iii), or an individual who requests information in
439
accordance with Subsection (4)(n)(v):
440
(i) is not guilty of a class A misdemeanor; and
441
(ii) is not subject to:
442
(A) dismissal from office in accordance with Subsection (6)(b); or
443
(B) disqualification from holding public office in accordance with Subsection
444
(6)(b).
445
(d) Notwithstanding Subsection (6)(a) or (b), for a disclosure of information to the
446
Office of the Legislative Auditor General in accordance with Title 36, Chapter 12,
447
Legislative Organization, an individual described in Subsection (2):
448
(i) is not guilty of a class A misdemeanor; and
449
(ii) is not subject to:
450
(A) dismissal from office in accordance with Subsection (6)(b); or
451
(B) disqualification from holding public office in accordance with Subsection
452
(6)(b).
453
(7) Except as provided in Section 59-1-404, this part does not apply to the property tax.
454
Section 6. Section 59-12-104 is amended to read:
455
59-12-104 (Effective 01/01/26). Exemptions.
456
Exemptions from the taxes imposed by this chapter are as follows:
457
(1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
458
under Chapter 13, Motor and Special Fuel Tax Act;
459
(2) subject to Section 59-12-104.6, sales to the state, its institutions, and its political
460
subdivisions; however, this exemption does not apply to sales of:
461
(a) construction materials except:
462
(i) construction materials purchased by or on behalf of institutions of the public
463
education system as defined in Utah Constitution, Article X, Section 2, provided
464
the construction materials are clearly identified and segregated and installed or
465
converted to real property which is owned by institutions of the public education
466
system; and
467
(ii) construction materials purchased by the state, its institutions, or its political
468
subdivisions which are installed or converted to real property by employees of the
469
state, its institutions, or its political subdivisions; or
470
(b) tangible personal property in connection with the construction, operation,
- 14 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
471
maintenance, repair, or replacement of a project, as defined in Section 11-13-103, or
472
facilities providing additional project capacity, as defined in Section 11-13-103;
473
(3)(a) sales of an item described in Subsection (3)(b) from a vending machine if:
474
(i) the proceeds of each sale do not exceed $1; and
475
(ii) the seller or operator of the vending machine reports an amount equal to 150% of
476
the cost of the item described in Subsection (3)(b) as goods consumed; and
477
(b) Subsection (3)(a) applies to:
478
(i) food and food ingredients; or
479
(ii) prepared food;
480
(4)(a) sales of the following to a commercial airline carrier for in-flight consumption:
481
(i) alcoholic beverages;
482
(ii) food and food ingredients; or
483
(iii) prepared food;
484
(b) sales of tangible personal property or a product transferred electronically:
485
(i) to a passenger;
486
(ii) by a commercial airline carrier; and
487
(iii) during a flight for in-flight consumption or in-flight use by the passenger; or
488
(c) services related to Subsection (4)(a) or (b);
489
(5) sales of parts and equipment for installation in an aircraft operated by a common carrier
490
in interstate or foreign commerce;
491
(6) sales of commercials, motion picture films, prerecorded audio program tapes or records,
492
and prerecorded video tapes by a producer, distributor, or studio to a motion picture
493
exhibitor, distributor, or commercial television or radio broadcaster;
494
(7)(a) except as provided in Subsection (85) and subject to Subsection (7)(b), sales of
495
cleaning or washing of tangible personal property if the cleaning or washing of the
496
tangible personal property is not assisted cleaning or washing of tangible personal
497
property;
498
(b) if a seller that sells at the same business location assisted cleaning or washing of
499
tangible personal property and cleaning or washing of tangible personal property that
500
is not assisted cleaning or washing of tangible personal property, the exemption
501
described in Subsection (7)(a) applies if the seller separately accounts for the sales of
502
the assisted cleaning or washing of the tangible personal property; and
503
(c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3, Utah
504
Administrative Rulemaking Act, the commission may make rules:
- 15 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
505
(i) governing the circumstances under which sales are at the same business location;
506
and
507
(ii) establishing the procedures and requirements for a seller to separately account for
508
sales of assisted cleaning or washing of tangible personal property;
509
(8) sales made to or by religious or charitable institutions in the conduct of their regular
510
religious or charitable functions and activities, if the requirements of Section 59-12-104.1
511
are fulfilled;
512
(9) sales of a vehicle of a type required to be registered under the motor vehicle laws of this
513
state if:
514
(a) the sale is not from the vehicle's lessor to the vehicle's lessee;
515
(b) the vehicle is not registered in this state; and
516
(c)(i) the vehicle is not used in this state; or
517
(ii) the vehicle is used in this state:
518
(A) if the vehicle is not used to conduct business, for a time period that does not
519
exceed the longer of:
520
(I) 30 days in any calendar year; or
521
(II) the time period necessary to transport the vehicle to the borders of this
522
state; or
523
(B) if the vehicle is used to conduct business, for the time period necessary to
524
transport the vehicle to the borders of this state;
525
(10)(a) amounts paid for an item described in Subsection (10)(b) if:
526
(i) the item is intended for human use; and
527
(ii)(A) a prescription was issued for the item; or
528
(B) the item was purchased by a hospital or other medical facility; and
529
(b)(i) Subsection (10)(a) applies to:
530
(A) a drug;
531
(B) a syringe; or
532
(C) a stoma supply; and
533
(ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
534
the commission may by rule define the terms:
535
(A) "syringe"; or
536
(B) "stoma supply";
537
(11) purchases or leases exempt under Section 19-12-201;
538
(12)(a) sales of an item described in Subsection (12)(c) served by:
- 16 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
539
(i) the following if the item described in Subsection (12)(c) is not available to the
540
general public:
541
(A) a church; or
542
(B) a charitable institution; or
543
(ii) an institution of higher education if:
544
(A) the item described in Subsection (12)(c) is not available to the general public;
545
or
546
(B) the item described in Subsection (12)(c) is prepaid as part of a student meal
547
plan offered by the institution of higher education; or
548
(b) sales of an item described in Subsection (12)(c) provided for a patient by:
549
(i) a medical facility; or
550
(ii) a nursing facility; and
551
(c) Subsections (12)(a) and (b) apply to:
552
(i) food and food ingredients;
553
(ii) prepared food; or
554
(iii) alcoholic beverages;
555
(13)(a) except as provided in Subsection (13)(b), the sale of tangible personal property
556
or a product transferred electronically by a person:
557
(i) regardless of the number of transactions involving the sale of that tangible
558
personal property or product transferred electronically by that person; and
559
(ii) not regularly engaged in the business of selling that type of tangible personal
560
property or product transferred electronically;
561
(b) this Subsection (13) does not apply if:
562
(i) the sale is one of a series of sales of a character to indicate that the person is
563
regularly engaged in the business of selling that type of tangible personal property
564
or product transferred electronically;
565
(ii) the person holds that person out as regularly engaged in the business of selling
566
that type of tangible personal property or product transferred electronically;
567
(iii) the person sells an item of tangible personal property or product transferred
568
electronically that the person purchased as a sale that is exempt under Subsection
569
(25); or
570
(iv) the sale is of a vehicle or vessel required to be titled or registered under the laws
571
of this state in which case the tax is based upon:
572
(A) the bill of sale, lease agreement, or other written evidence of value of the
- 17 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
573
vehicle or vessel being sold; or
574
(B) in the absence of a bill of sale, lease agreement, or other written evidence of
575
value, the fair market value of the vehicle or vessel being sold at the time of the
576
sale as determined by the commission; and
577
(c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
578
commission shall make rules establishing the circumstances under which:
579
(i) a person is regularly engaged in the business of selling a type of tangible personal
580
property or product transferred electronically;
581
(ii) a sale of tangible personal property or a product transferred electronically is one
582
of a series of sales of a character to indicate that a person is regularly engaged in
583
the business of selling that type of tangible personal property or product
584
transferred electronically; or
585
(iii) a person holds that person out as regularly engaged in the business of selling a
586
type of tangible personal property or product transferred electronically;
587
(14) amounts paid or charged for a purchase or lease of machinery, equipment, normal
588
operating repair or replacement parts, or materials, except for office equipment or office
589
supplies, by:
590
(a) a manufacturing facility that:
591
(i) is located in the state; and
592
(ii) uses or consumes the machinery, equipment, normal operating repair or
593
replacement parts, or materials:
594
(A) in the manufacturing process to manufacture an item sold as tangible personal
595
property, as the commission may define that phrase in accordance with Title
596
63G, Chapter 3, Utah Administrative Rulemaking Act; or
597
(B) for a scrap recycler, to process an item sold as tangible personal property, as
598
the commission may define that phrase in accordance with Title 63G, Chapter
599
3, Utah Administrative Rulemaking Act;
600
(b) an establishment, as the commission defines that term in accordance with Title 63G,
601
Chapter 3, Utah Administrative Rulemaking Act, that:
602
(i) is described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS
603
Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
604
Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except
605
Fuels) Mining, of the 2002 North American Industry Classification System of the
606
federal Executive Office of the President, Office of Management and Budget;
- 18 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
607
(ii) is located in the state; and
608
(iii) uses or consumes the machinery, equipment, normal operating repair or
609
replacement parts, or materials in:
610
(A) the production process to produce an item sold as tangible personal property,
611
as the commission may define that phrase in accordance with Title 63G,
612
Chapter 3, Utah Administrative Rulemaking Act;
613
(B) research and development, as the commission may define that phrase in
614
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
615
(C) transporting, storing, or managing tailings, overburden, or similar waste
616
materials produced from mining;
617
(D) developing or maintaining a road, tunnel, excavation, or similar feature used
618
in mining; or
619
(E) preventing, controlling, or reducing dust or other pollutants from mining; or
620
(c) an establishment, as the commission defines that term in accordance with Title 63G,
621
Chapter 3, Utah Administrative Rulemaking Act, that:
622
(i) is described in NAICS Code 518112, Web Search Portals, of the 2002 North
623
American Industry Classification System of the federal Executive Office of the
624
President, Office of Management and Budget;
625
(ii) is located in the state; and
626
(iii) uses or consumes the machinery, equipment, normal operating repair or
627
replacement parts, or materials in the operation of the web search portal;
628
(15)(a) sales of the following if the requirements of Subsection (15)(b) are met:
629
(i) tooling;
630
(ii) special tooling;
631
(iii) support equipment;
632
(iv) special test equipment; or
633
(v) parts used in the repairs or renovations of tooling or equipment described in
634
Subsections (15)(a)(i) through (iv); and
635
(b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
636
(i) the tooling, equipment, or parts are used or consumed exclusively in the
637
performance of any aerospace or electronics industry contract with the United
638
States government or any subcontract under that contract; and
639
(ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
640
title to the tooling, equipment, or parts is vested in the United States government
- 19 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
641
as evidenced by:
642
(A) a government identification tag placed on the tooling, equipment, or parts; or
643
(B) listing on a government-approved property record if placing a government
644
identification tag on the tooling, equipment, or parts is impractical;
645
(16) sales of newspapers or newspaper subscriptions;
646
(17)(a) except as provided in Subsection (17)(b), tangible personal property or a product
647
transferred electronically traded in as full or part payment of the purchase price,
648
except that for purposes of calculating sales or use tax upon vehicles not sold by a
649
vehicle dealer, trade-ins are limited to other vehicles only, and the tax is based upon:
650
(i) the bill of sale or other written evidence of value of the vehicle being sold and the
651
vehicle being traded in; or
652
(ii) in the absence of a bill of sale or other written evidence of value, the then existing
653
fair market value of the vehicle being sold and the vehicle being traded in, as
654
determined by the commission; and
655
(b) Subsection (17)(a) does not apply to the following items of tangible personal
656
property or products transferred electronically traded in as full or part payment of the
657
purchase price:
658
(i) money;
659
(ii) electricity;
660
(iii) water;
661
(iv) gas; or
662
(v) steam;
663
(18)(a)(i) except as provided in Subsection (18)(b), sales of tangible personal
664
property or a product transferred electronically used or consumed primarily and
665
directly in farming operations, regardless of whether the tangible personal
666
property or product transferred electronically:
667
(A) becomes part of real estate; or
668
(B) is installed by a farmer, contractor, or subcontractor; or
669
(ii) sales of parts used in the repairs or renovations of tangible personal property or a
670
product transferred electronically if the tangible personal property or product
671
transferred electronically is exempt under Subsection (18)(a)(i); and
672
(b) amounts paid or charged for the following are subject to the taxes imposed by this
673
chapter:
674
(i)(A) subject to Subsection (18)(b)(i)(B), machinery, equipment, materials, or
- 20 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
675
supplies if used in a manner that is incidental to farming; and
676
(B) tangible personal property that is considered to be used in a manner that is
677
incidental to farming includes:
678
(I) hand tools; or
679
(II) maintenance and janitorial equipment and supplies;
680
(ii)(A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
681
transferred electronically if the tangible personal property or product
682
transferred electronically is used in an activity other than farming; and
683
(B) tangible personal property or a product transferred electronically that is
684
considered to be used in an activity other than farming includes:
685
(I) office equipment and supplies; or
686
(II) equipment and supplies used in:
687
(Aa) the sale or distribution of farm products;
688
(Bb) research; or
689
(Cc) transportation; or
690
(iii) a vehicle required to be registered by the laws of this state during the period
691
ending two years after the date of the vehicle's purchase;
692
(19) sales of hay;
693
(20) exclusive sale during the harvest season of seasonal crops, seedling plants, or garden,
694
farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
695
garden, farm, or other agricultural produce is sold by:
696
(a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
697
agricultural produce;
698
(b) an employee of the producer described in Subsection (20)(a); or
699
(c) a member of the immediate family of the producer described in Subsection (20)(a);
700
(21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued under
701
the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
702
(22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
703
nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
704
wholesaler, or retailer for use in packaging tangible personal property to be sold by that
705
manufacturer, processor, wholesaler, or retailer;
706
(23) a product stored in the state for resale;
707
(24)(a) purchases of a product if:
708
(i) the product is:
- 21 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
709
(A) purchased outside of this state;
710
(B) brought into this state:
711
(I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
712
(II) by a nonresident person who is not living or working in this state at the
713
time of the purchase;
714
(C) used for the personal use or enjoyment of the nonresident person described in
715
Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state;
716
and
717
(D) not used in conducting business in this state; and
718
(ii) for:
719
(A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use
720
of the product for a purpose for which the product is designed occurs outside of
721
this state;
722
(B) a boat, the boat is registered outside of this state; or
723
(C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is
724
registered outside of this state;
725
(b) the exemption provided for in Subsection (24)(a) does not apply to:
726
(i) a lease or rental of a product; or
727
(ii) a sale of a vehicle exempt under Subsection (33); and
728
(c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
729
purposes of Subsection (24)(a), the commission may by rule define what constitutes
730
the following:
731
(i) conducting business in this state if that phrase has the same meaning in this
732
Subsection (24) as in Subsection (63);
733
(ii) the first use of a product if that phrase has the same meaning in this Subsection
734
(24) as in Subsection (63); or
735
(iii) a purpose for which a product is designed if that phrase has the same meaning in
736
this Subsection (24) as in Subsection (63);
737
(25) a product purchased for resale in the regular course of business, either in its original
738
form or as an ingredient or component part of a manufactured or compounded product;
739
(26) a product upon which a sales or use tax was paid to some other state, or one of its
740
subdivisions, except that the state shall be paid any difference between the tax paid and
741
the tax imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment
742
is allowed if the tax paid was greater than the tax imposed by this part and Part 2, Local
- 22 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
743
Sales and Use Tax Act;
744
(27) any sale of a service described in Subsections 59-12-103(1)(b), (c), and (d) to a person
745
for use in compounding a service taxable under the subsections;
746
(28) purchases made in accordance with the special supplemental nutrition program for
747
women, infants, and children established in 42 U.S.C. Sec. 1786;
748
(29) sales or leases of rolls, rollers, refractory brick, electric motors, or other replacement
749
parts used in the furnaces, mills, or ovens of a steel mill described in SIC Code 3312 of
750
the 1987 Standard Industrial Classification Manual of the federal Executive Office of the
751
President, Office of Management and Budget;
752
(30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
753
Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard
754
motor is:
755
(a) not registered in this state; and
756
(b)(i) not used in this state; or
757
(ii) used in this state:
758
(A) if the boat, boat trailer, or outboard motor is not used to conduct business, for
759
a time period that does not exceed the longer of:
760
(I) 30 days in any calendar year; or
761
(II) the time period necessary to transport the boat, boat trailer, or outboard
762
motor to the borders of this state; or
763
(B) if the boat, boat trailer, or outboard motor is used to conduct business, for the
764
time period necessary to transport the boat, boat trailer, or outboard motor to
765
the borders of this state;
766
(31) sales of aircraft manufactured in Utah;
767
(32) amounts paid for the purchase of telecommunications service for purposes of
768
providing telecommunications service;
769
(33) sales, leases, or uses of the following:
770
(a) a vehicle by an authorized carrier; or
771
(b) tangible personal property that is installed on a vehicle:
772
(i) sold or leased to or used by an authorized carrier; and
773
(ii) before the vehicle is placed in service for the first time;
774
(34)(a) 45% of the sales price of any new manufactured home; and
775
(b) 100% of the sales price of any used manufactured home;
776
(35) sales relating to schools and fundraising sales;
- 23 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
777
(36) sales or rentals of durable medical equipment if:
778
(a) a person presents a prescription for the durable medical equipment; and
779
(b) the durable medical equipment is used for home use only;
780
(37)(a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
781
Section 72-11-102; and
782
(b) the commission shall by rule determine the method for calculating sales exempt
783
under Subsection (37)(a) that are not separately metered and accounted for in utility
784
billings;
785
(38) sales to a ski resort of:
786
(a) snowmaking equipment;
787
(b) ski slope grooming equipment;
788
(c) passenger ropeways as defined in Section 72-11-102; or
789
(d) parts used in the repairs or renovations of equipment or passenger ropeways
790
described in Subsections (38)(a) through (c);
791
(39) subject to Subsection 59-12-103(2)(j), sales of natural gas, electricity, heat, coal, fuel
792
oil, or other fuels for industrial use;
793
(40)(a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
794
amusement, entertainment, or recreation an unassisted amusement device as defined
795
in Section 59-12-102;
796
(b) if a seller that sells or rents at the same business location the right to use or operate
797
for amusement, entertainment, or recreation one or more unassisted amusement
798
devices and one or more assisted amusement devices, the exemption described in
799
Subsection (40)(a) applies if the seller separately accounts for the sales or rentals of
800
the right to use or operate for amusement, entertainment, or recreation for the assisted
801
amusement devices; and
802
(c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3, Utah
803
Administrative Rulemaking Act, the commission may make rules:
804
(i) governing the circumstances under which sales are at the same business location;
805
and
806
(ii) establishing the procedures and requirements for a seller to separately account for
807
the sales or rentals of the right to use or operate for amusement, entertainment, or
808
recreation for assisted amusement devices;
809
(41)(a) sales of photocopies by:
810
(i) a governmental entity; or
- 24 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
811
(ii) an entity within the state system of public education, including:
812
(A) a school; or
813
(B) the State Board of Education; or
814
(b) sales of publications by a governmental entity;
815
(42) amounts paid for admission to an athletic event at an institution of higher education
816
that is subject to the provisions of Title IX of the Education Amendments of 1972, 20
817
U.S.C. Sec. 1681 et seq.;
818
(43)(a) sales made to or by:
819
(i) an area agency on aging; or
820
(ii) a senior citizen center owned by a county, city, or town; or
821
(b) sales made by a senior citizen center that contracts with an area agency on aging;
822
(44) sales or leases of semiconductor fabricating, processing, research, or development
823
materials regardless of whether the semiconductor fabricating, processing, research, or
824
development materials:
825
(a) actually come into contact with a semiconductor; or
826
(b) ultimately become incorporated into real property;
827
(45) an amount paid by or charged to a purchaser for accommodations and services
828
described in Subsection 59-12-103(1)(i) to the extent the amount is exempt under
829
Section 59-12-104.2;
830
(46) the lease or use of a vehicle issued a temporary sports event registration certificate in
831
accordance with Section 41-3-306 for the event period specified on the temporary sports
832
event registration certificate;
833
(47)(a) sales or uses of electricity, if the sales or uses are made under a retail tariff
834
adopted by the Public Service Commission only for purchase of electricity produced
835
from a new alternative energy source built after January 1, 2016, as designated in the
836
tariff by the Public Service Commission; and
837
(b) for a residential use customer only, the exemption under Subsection (47)(a) applies
838
only to the portion of the tariff rate a customer pays under the tariff described in
839
Subsection (47)(a) that exceeds the tariff rate under the tariff described in Subsection
840
(47)(a) that the customer would have paid absent the tariff;
841
(48) sales or rentals of mobility enhancing equipment if a person presents a prescription for
842
the mobility enhancing equipment;
843
(49) sales of water in a:
844
(a) pipe;
- 25 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
845
(b) conduit;
846
(c) ditch; or
847
(d) reservoir;
848
(50) sales of currency or coins that constitute legal tender of a state, the United States, or a
849
foreign nation;
850
(51)(a) sales of an item described in Subsection (51)(b) if the item:
851
(i) does not constitute legal tender of a state, the United States, or a foreign nation;
852
and
853
(ii) has a gold, silver, or platinum content of 50% or more; and
854
(b) Subsection (51)(a) applies to a gold, silver, or platinum:
855
(i) ingot;
856
(ii) bar;
857
(iii) medallion; or
858
(iv) decorative coin;
859
(52) amounts paid on a sale-leaseback transaction;
860
(53) sales of a prosthetic device:
861
(a) for use on or in a human; and
862
(b)(i) for which a prescription is required; or
863
(ii) if the prosthetic device is purchased by a hospital or other medical facility;
864
(54)(a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
865
machinery or equipment by an establishment described in Subsection (54)(c) if the
866
machinery or equipment is primarily used in the production or postproduction of the
867
following media for commercial distribution:
868
(i) a motion picture;
869
(ii) a television program;
870
(iii) a movie made for television;
871
(iv) a music video;
872
(v) a commercial;
873
(vi) a documentary; or
874
(vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
875
commission by administrative rule made in accordance with Subsection (54)(d); or
876
(b) purchases, leases, or rentals of machinery or equipment by an establishment
877
described in Subsection (54)(c) that is used for the production or postproduction of
878
the following are subject to the taxes imposed by this chapter:
- 26 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
879
(i) a live musical performance;
880
(ii) a live news program; or
881
(iii) a live sporting event;
882
(c) the following establishments listed in the 1997 North American Industry
883
Classification System of the federal Executive Office of the President, Office of
884
Management and Budget, apply to Subsections (54)(a) and (b):
885
(i) NAICS Code 512110; or
886
(ii) NAICS Code 51219; and
887
(d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
888
commission may by rule:
889
(i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
890
or
891
(ii) define:
892
(A) "commercial distribution";
893
(B) "live musical performance";
894
(C) "live news program"; or
895
(D) "live sporting event";
896
(55)(a) leases of seven or more years or purchases made on or after July 1, 2004, but on
897
or before June 30, 2027, of tangible personal property that:
898
(i) is leased or purchased for or by a facility that:
899
(A) is an alternative energy electricity production facility;
900
(B) is located in the state; and
901
(C)(I) becomes operational on or after July 1, 2004; or
902
(II) has its generation capacity increased by one or more megawatts on or after
903
July 1, 2004, as a result of the use of the tangible personal property;
904
(ii) has an economic life of five or more years; and
905
(iii) is used to make the facility or the increase in capacity of the facility described in
906
Subsection (55)(a)(i) operational up to the point of interconnection with an
907
existing transmission grid including:
908
(A) a wind turbine;
909
(B) generating equipment;
910
(C) a control and monitoring system;
911
(D) a power line;
912
(E) substation equipment;
- 27 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
913
(F) lighting;
914
(G) fencing;
915
(H) pipes; or
916
(I) other equipment used for locating a power line or pole; and
917
(b) this Subsection (55) does not apply to:
918
(i) tangible personal property used in construction of:
919
(A) a new alternative energy electricity production facility; or
920
(B) the increase in the capacity of an alternative energy electricity production
921
facility;
922
(ii) contracted services required for construction and routine maintenance activities;
923
and
924
(iii) unless the tangible personal property is used or acquired for an increase in
925
capacity of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal
926
property used or acquired after:
927
(A) the alternative energy electricity production facility described in Subsection
928
(55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
929
(B) the increased capacity described in Subsection (55)(a)(i) is operational as
930
described in Subsection (55)(a)(iii);
931
(56)(a) leases of seven or more years or purchases made on or after July 1, 2004, but on
932
or before June 30, 2027, of tangible personal property that:
933
(i) is leased or purchased for or by a facility that:
934
(A) is a waste energy production facility;
935
(B) is located in the state; and
936
(C)(I) becomes operational on or after July 1, 2004; or
937
(II) has its generation capacity increased by one or more megawatts on or after
938
July 1, 2004, as a result of the use of the tangible personal property;
939
(ii) has an economic life of five or more years; and
940
(iii) is used to make the facility or the increase in capacity of the facility described in
941
Subsection (56)(a)(i) operational up to the point of interconnection with an
942
existing transmission grid including:
943
(A) generating equipment;
944
(B) a control and monitoring system;
945
(C) a power line;
946
(D) substation equipment;
- 28 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
947
(E) lighting;
948
(F) fencing;
949
(G) pipes; or
950
(H) other equipment used for locating a power line or pole; and
951
(b) this Subsection (56) does not apply to:
952
(i) tangible personal property used in construction of:
953
(A) a new waste energy facility; or
954
(B) the increase in the capacity of a waste energy facility;
955
(ii) contracted services required for construction and routine maintenance activities;
956
and
957
(iii) unless the tangible personal property is used or acquired for an increase in
958
capacity described in Subsection (56)(a)(i)(C)(II), tangible personal property used
959
or acquired after:
960
(A) the waste energy facility described in Subsection (56)(a)(i) is operational as
961
described in Subsection (56)(a)(iii); or
962
(B) the increased capacity described in Subsection (56)(a)(i) is operational as
963
described in Subsection (56)(a)(iii);
964
(57)(a) leases of five or more years or purchases made on or after July 1, 2004, but on or
965
before June 30, 2027, of tangible personal property that:
966
(i) is leased or purchased for or by a facility that:
967
(A) is located in the state;
968
(B) produces fuel from alternative energy, including:
969
(I) methanol; or
970
(II) ethanol; and
971
(C)(I) becomes operational on or after July 1, 2004; or
972
(II) has its capacity to produce fuel increase by 25% or more on or after July 1,
973
2004, as a result of the installation of the tangible personal property;
974
(ii) has an economic life of five or more years; and
975
(iii) is installed on the facility described in Subsection (57)(a)(i);
976
(b) this Subsection (57) does not apply to:
977
(i) tangible personal property used in construction of:
978
(A) a new facility described in Subsection (57)(a)(i); or
979
(B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
980
(ii) contracted services required for construction and routine maintenance activities;
- 29 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
981
and
982
(iii) unless the tangible personal property is used or acquired for an increase in
983
capacity described in Subsection (57)(a)(i)(C)(II), tangible personal property used
984
or acquired after:
985
(A) the facility described in Subsection (57)(a)(i) is operational; or
986
(B) the increased capacity described in Subsection (57)(a)(i) is operational;
987
(58)(a) subject to Subsection (58)(b), sales of tangible personal property or a product
988
transferred electronically to a person within this state if that tangible personal
989
property or product transferred electronically is subsequently shipped outside the
990
state and incorporated pursuant to contract into and becomes a part of real property
991
located outside of this state; and
992
(b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
993
state or political entity to which the tangible personal property is shipped imposes a
994
sales, use, gross receipts, or other similar transaction excise tax on the transaction
995
against which the other state or political entity allows a credit for sales and use taxes
996
imposed by this chapter;
997
(59) purchases:
998
(a) of one or more of the following items in printed or electronic format:
999
(i) a list containing information that includes one or more:
1000
(A) names; or
1001
(B) addresses; or
1002
(ii) a database containing information that includes one or more:
1003
(A) names; or
1004
(B) addresses; and
1005
(b) used to send direct mail;
1006
(60) redemptions or repurchases of a product by a person if that product was:
1007
(a) delivered to a pawnbroker as part of a pawn transaction; and
1008
(b) redeemed or repurchased within the time period established in a written agreement
1009
between the person and the pawnbroker for redeeming or repurchasing the product;
1010
(61)(a) purchases or leases of an item described in Subsection (61)(b) if the item:
1011
(i) is purchased or leased by, or on behalf of, a telecommunications service provider;
1012
and
1013
(ii) has a useful economic life of one or more years; and
1014
(b) the following apply to Subsection (61)(a):
- 30 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
1015
(i) telecommunications enabling or facilitating equipment, machinery, or software;
1016
(ii) telecommunications equipment, machinery, or software required for 911 service;
1017
(iii) telecommunications maintenance or repair equipment, machinery, or software;
1018
(iv) telecommunications switching or routing equipment, machinery, or software; or
1019
(v) telecommunications transmission equipment, machinery, or software;
1020
(62)(a) beginning on July 1, 2006, and ending on June 30, 2027, purchases of tangible
1021
personal property or a product transferred electronically that are used in the research
1022
and development of alternative energy technology; and
1023
(b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1024
commission may, for purposes of Subsection (62)(a), make rules defining what
1025
constitutes purchases of tangible personal property or a product transferred
1026
electronically that are used in the research and development of alternative energy
1027
technology;
1028
(63)(a) purchases of tangible personal property or a product transferred electronically if:
1029
(i) the tangible personal property or product transferred electronically is:
1030
(A) purchased outside of this state;
1031
(B) brought into this state at any time after the purchase described in Subsection
1032
(63)(a)(i)(A); and
1033
(C) used in conducting business in this state; and
1034
(ii) for:
1035
(A) tangible personal property or a product transferred electronically other than
1036
the tangible personal property described in Subsection (63)(a)(ii)(B), the first
1037
use of the property for a purpose for which the property is designed occurs
1038
outside of this state; or
1039
(B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is
1040
registered outside of this state and not required to be registered in this state
1041
under Section 41-1a-202 or 73-18-9 based on residency;
1042
(b) the exemption provided for in Subsection (63)(a) does not apply to:
1043
(i) a lease or rental of tangible personal property or a product transferred
1044
electronically; or
1045
(ii) a sale of a vehicle exempt under Subsection (33); and
1046
(c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
1047
purposes of Subsection (63)(a), the commission may by rule define what constitutes
1048
the following:
- 31 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
1049
(i) conducting business in this state if that phrase has the same meaning in this
1050
Subsection (63) as in Subsection (24);
1051
(ii) the first use of tangible personal property or a product transferred electronically if
1052
that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
1053
(iii) a purpose for which tangible personal property or a product transferred
1054
electronically is designed if that phrase has the same meaning in this Subsection
1055
(63) as in Subsection (24);
1056
(64) sales of disposable home medical equipment or supplies if:
1057
(a) a person presents a prescription for the disposable home medical equipment or
1058
supplies;
1059
(b) the disposable home medical equipment or supplies are used exclusively by the
1060
person to whom the prescription described in Subsection (64)(a) is issued; and
1061
(c) the disposable home medical equipment and supplies are listed as eligible for
1062
payment under:
1063
(i) Title XVIII, federal Social Security Act; or
1064
(ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
1065
(65) sales:
1066
(a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit District
1067
Act; or
1068
(b) of tangible personal property to a subcontractor of a public transit district, if the
1069
tangible personal property is:
1070
(i) clearly identified; and
1071
(ii) installed or converted to real property owned by the public transit district;
1072
(66) sales of construction materials:
1073
(a) purchased on or after July 1, 2010;
1074
(b) purchased by, on behalf of, or for the benefit of an international airport:
1075
(i) located within a county of the first class; and
1076
(ii) that has a United States customs office on its premises; and
1077
(c) if the construction materials are:
1078
(i) clearly identified;
1079
(ii) segregated; and
1080
(iii) installed or converted to real property:
1081
(A) owned or operated by the international airport described in Subsection (66)(b);
1082
and
- 32 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
1083
(B) located at the international airport described in Subsection (66)(b);
1084
(67) sales of construction materials:
1085
(a) purchased on or after July 1, 2008;
1086
(b) purchased by, on behalf of, or for the benefit of a new airport:
1087
(i) located within a county of the second class; and
1088
(ii) that is owned or operated by a city in which an airline as defined in Section
1089
59-2-102 is headquartered; and
1090
(c) if the construction materials are:
1091
(i) clearly identified;
1092
(ii) segregated; and
1093
(iii) installed or converted to real property:
1094
(A) owned or operated by the new airport described in Subsection (67)(b);
1095
(B) located at the new airport described in Subsection (67)(b); and
1096
(C) as part of the construction of the new airport described in Subsection (67)(b);
1097
(68) except for the tax imposed by Subsection 59-12-103(2)(d), sales of fuel to a common
1098
carrier that is a railroad for use in a locomotive engine;
1099
(69) purchases and sales described in Section 63H-4-111;
1100
(70)(a) sales of tangible personal property to an aircraft maintenance, repair, and
1101
overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in
1102
this state of a fixed wing turbine powered aircraft if that fixed wing turbine powered
1103
aircraft's registration lists a state or country other than this state as the location of
1104
registry of the fixed wing turbine powered aircraft; or
1105
(b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
1106
provider in connection with the maintenance, repair, overhaul, or refurbishment in
1107
this state of a fixed wing turbine powered aircraft if that fixed wing turbine powered
1108
aircraft's registration lists a state or country other than this state as the location of
1109
registry of the fixed wing turbine powered aircraft;
1110
(71) subject to Section 59-12-104.4, sales of a textbook for a higher education course:
1111
(a) to a person admitted to an institution of higher education; and
1112
(b) by a seller, other than a bookstore owned by an institution of higher education, if
1113
51% or more of that seller's sales revenue for the previous calendar quarter are sales
1114
of a textbook for a higher education course;
1115
(72) a license fee or tax a municipality imposes in accordance with Subsection 10-1-203(5)
1116
on a purchaser from a business for which the municipality provides an enhanced level of
- 33 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
1117
municipal services;
1118
(73) amounts paid or charged for construction materials used in the construction of a new or
1119
expanding life science research and development facility in the state, if the construction
1120
materials are:
1121
(a) clearly identified;
1122
(b) segregated; and
1123
(c) installed or converted to real property;
1124
(74) amounts paid or charged for:
1125
(a) a purchase or lease of machinery and equipment that:
1126
(i) are used in performing qualified research:
1127
(A) as defined in Section 41(d), Internal Revenue Code; and
1128
(B) in the state; and
1129
(ii) have an economic life of three or more years; and
1130
(b) normal operating repair or replacement parts:
1131
(i) for the machinery and equipment described in Subsection (74)(a); and
1132
(ii) that have an economic life of three or more years;
1133
(75) a sale or lease of tangible personal property used in the preparation of prepared food if:
1134
(a) for a sale:
1135
(i) the ownership of the seller and the ownership of the purchaser are identical; and
1136
(ii) the seller or the purchaser paid a tax under this chapter on the purchase of that
1137
tangible personal property prior to making the sale; or
1138
(b) for a lease:
1139
(i) the ownership of the lessor and the ownership of the lessee are identical; and
1140
(ii) the lessor or the lessee paid a tax under this chapter on the purchase of that
1141
tangible personal property prior to making the lease;
1142
(76)(a) purchases of machinery or equipment if:
1143
(i) the purchaser is an establishment described in NAICS Subsector 713, Amusement,
1144
Gambling, and Recreation Industries, of the 2012 North American Industry
1145
Classification System of the federal Executive Office of the President, Office of
1146
Management and Budget;
1147
(ii) the machinery or equipment:
1148
(A) has an economic life of three or more years; and
1149
(B) is used by one or more persons who pay admission or user fees described in
1150
Subsection 59-12-103(1)(f) to the purchaser of the machinery and equipment;
- 34 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
1151
and
1152
(iii) 51% or more of the purchaser's sales revenue for the previous calendar quarter is:
1153
(A) amounts paid or charged as admission or user fees described in Subsection
1154
59-12-103(1)(f); and
1155
(B) subject to taxation under this chapter; and
1156
(b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1157
commission may make rules for verifying that 51% of a purchaser's sales revenue for
1158
the previous calendar quarter is:
1159
(i) amounts paid or charged as admission or user fees described in Subsection
1160
59-12-103(1)(f); and
1161
(ii) subject to taxation under this chapter;
1162
(77) purchases of a short-term lodging consumable by a business that provides
1163
accommodations and services described in Subsection 59-12-103(1)(i);
1164
(78) amounts paid or charged to access a database:
1165
(a) if the primary purpose for accessing the database is to view or retrieve information
1166
from the database; and
1167
(b) not including amounts paid or charged for a:
1168
(i) digital audio work;
1169
(ii) digital audio-visual work; or
1170
(iii) digital book;
1171
(79) amounts paid or charged for a purchase or lease made by an electronic financial
1172
payment service, of:
1173
(a) machinery and equipment that:
1174
(i) are used in the operation of the electronic financial payment service; and
1175
(ii) have an economic life of three or more years; and
1176
(b) normal operating repair or replacement parts that:
1177
(i) are used in the operation of the electronic financial payment service; and
1178
(ii) have an economic life of three or more years;
1179
(80) sales of a fuel cell as defined in Section 54-15-102;
1180
(81) amounts paid or charged for a purchase or lease of tangible personal property or a
1181
product transferred electronically if the tangible personal property or product transferred
1182
electronically:
1183
(a) is stored, used, or consumed in the state; and
1184
(b) is temporarily brought into the state from another state:
- 35 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
1185
(i) during a disaster period as defined in Section 53-2a-1202;
1186
(ii) by an out-of-state business as defined in Section 53-2a-1202;
1187
(iii) for a declared state disaster or emergency as defined in Section 53-2a-1202; and
1188
(iv) for disaster- or emergency-related work as defined in Section 53-2a-1202;
1189
(82) sales of goods and services at a morale, welfare, and recreation facility, as defined in
1190
Section 39A-7-102, made pursuant to Title 39A, Chapter 7, Morale, Welfare, and
1191
Recreation Program;
1192
(83) amounts paid or charged for a purchase or lease of molten magnesium;
1193
(84) amounts paid or charged for a purchase or lease made by a qualifying data center or an
1194
occupant of a qualifying data center of machinery, equipment, or normal operating
1195
repair or replacement parts, if the machinery, equipment, or normal operating repair or
1196
replacement parts:
1197
(a) are used in:
1198
(i) the operation of the qualifying data center; or
1199
(ii) the occupant's operations in the qualifying data center; and
1200
(b) have an economic life of one or more years;
1201
(85) sales of cleaning or washing of a vehicle, except for cleaning or washing of a vehicle
1202
that includes cleaning or washing of the interior of the vehicle;
1203
(86) amounts paid or charged for a purchase or lease of machinery, equipment, normal
1204
operating repair or replacement parts, catalysts, chemicals, reagents, solutions, or
1205
supplies used or consumed:
1206
(a) by a refiner who owns, leases, operates, controls, or supervises a refinery as defined
1207
in Section 79-6-701 located in the state;
1208
(b) if the machinery, equipment, normal operating repair or replacement parts, catalysts,
1209
chemicals, reagents, solutions, or supplies are used or consumed in:
1210
(i) the production process to produce gasoline or diesel fuel, or at which blendstock is
1211
added to gasoline or diesel fuel;
1212
(ii) research and development;
1213
(iii) transporting, storing, or managing raw materials, work in process, finished
1214
products, and waste materials produced from refining gasoline or diesel fuel, or
1215
adding blendstock to gasoline or diesel fuel;
1216
(iv) developing or maintaining a road, tunnel, excavation, or similar feature used in
1217
refining; or
1218
(v) preventing, controlling, or reducing pollutants from refining; and
- 36 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
1219
(c) if the person holds a valid refiner tax exemption certification as defined in Section
1220
79-6-701;
1221
(87) amounts paid to or charged by a proprietor for accommodations and services, as
1222
defined in Section 63H-1-205, if the proprietor is subject to the MIDA accommodations
1223
tax imposed under Section 63H-1-205;
1224
(88) amounts paid or charged for a purchase or lease of machinery, equipment, normal
1225
operating repair or replacement parts, or materials, except for office equipment or office
1226
supplies, by an establishment, as the commission defines that term in accordance with
1227
Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that:
1228
(a) is described in NAICS Code 621511, Medical Laboratories, of the 2017 North
1229
American Industry Classification System of the federal Executive Office of the
1230
President, Office of Management and Budget;
1231
(b) is located in this state; and
1232
(c) uses the machinery, equipment, normal operating repair or replacement parts, or
1233
materials in the operation of the establishment;
1234
(89) amounts paid or charged for an item exempt under Section 59-12-104.10;
1235
(90) sales of a note, leaf, foil, or film, if the item:
1236
(a) is used as currency;
1237
(b) does not constitute legal tender of a state, the United States, or a foreign nation; and
1238
(c) has a gold, silver, or platinum metallic content of 50% or more, exclusive of any
1239
transparent polymer holder, coating, or encasement;
1240
(91) amounts paid or charged for admission to an indoor skydiving, rock climbing, or
1241
surfing facility, if a trained instructor:
1242
(a) is present with the participant, in person or by video, for the duration of the activity;
1243
and
1244
(b) actively instructs the participant, including providing observation or feedback;
1245
(92) amounts paid or charged in connection with the construction, operation, maintenance,
1246
repair, or replacement of facilities owned by or constructed for:
1247
(a) a distribution electrical cooperative, as defined in Section 54-2-1; or
1248
(b) a wholesale electrical cooperative, as defined in Section 54-2-1;
1249
(93) amounts paid by the service provider for tangible personal property, other than
1250
machinery, equipment, parts, office supplies, electricity, gas, heat, steam, or other fuels,
1251
that:
1252
(a) is consumed in the performance of a service that is subject to tax under Subsection
- 37 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
1253
59-12-103(1)(b), (f), (g), (h), (i), or (j);
1254
(b) has to be consumed for the service provider to provide the service described in
1255
Subsection (93)(a); and
1256
(c) will be consumed in the performance of the service described in Subsection (93)(a),
1257
to one or more customers, to the point that the tangible personal property disappears
1258
or cannot be used for any other purpose;
1259
(94) sales of rail rolling stock manufactured in Utah;
1260
(95) amounts paid or charged for sales of sand, gravel, rock aggregate, cement products, or
1261
construction materials between establishments, as the commission defines that term in
1262
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, if:
1263
(a) the establishments are related directly or indirectly through 100% common
1264
ownership or control; and
1265
(b) each establishment is described in one of the following subsectors of the 2022 North
1266
American Industry Classification System of the federal Executive Office of the
1267
President, Office of Management and Budget:
1268
(i) NAICS Subsector 237, Heavy and Civil Engineering Construction; or
1269
(ii) NAICS Subsector 327, Nonmetallic Mineral Product Manufacturing; and
1270
(96) sales of construction materials used for the construction of a qualified stadium, as
1271
defined in Section 11-70-101[; and] .
1272
[(97) amounts paid or charged for sales of a cannabinoid product as that term is defined in
1273
Section 4-41-102.]
1274
Section 7. Section 59-31-101 is amended to read:
1275
CHAPTER 31. SPECIALIZED PRODUCT LICENSING AND TAX ACT
1276
59-31-101 (Effective 01/01/26). Definitions.
1277
As used in this chapter:
1278
(1) "Cannabinoid product" means the same as that term is defined in Section 4-41-102.
1279
(2) "Kratom product" means the same as that term is defined in Section 4-45-102.
1280
[(2)] (3) "Licensee" means a retailer that holds a valid license under Part 2, Licensing, to sell
1281
a [cannabinoid] specialized product.
1282
[(3)] (4) "Retail price" means the amount charged by a retailer for a [cannabinoid] specialized
1283
product.
1284
[(4)] (5) "Retailer" means a person that sells a [cannabionoid] specialized product to a
1285
consumer for personal use.
1286
(6) "Specialized product" means a cannabinoid product or a kratom product.
- 38 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
1287
Section 8. Section 59-31-201 is amended to read:
1288
59-31-201 (Effective 01/01/26). Prohibition on the sale of a specialized product
1289
without license.
1290
(1) A [person] retailer may not sell, offer to sell, or distribute a [cannabinoid] specialized
1291
product in this state without first:
1292
(a) obtaining a license from the commission under Section 59-31-202; and
1293
(b) complying with the bonding requirement described in Section 59-31-202.
1294
(2) It is a class B misdemeanor for a person to violate Subsection (1).
1295
Section 9. Section 59-31-202 is amended to read:
1296
59-31-202 (Effective 01/01/26). Issuance of license.
1297
(1) The commission shall issue a license to sell a [cannabinoid] specialized product to a
1298
retailer that submits an application, on a form created by the commission, that includes:
1299
(a) the retailer's name;
1300
(b) the address of the physical location permitted under Section 4-41-103.3 or Section
1301
4-45-104 where the retailer sells the [cannabinoid] specialized product; and
1302
(c) any other information the commission requires to implement this chapter.
1303
(2) A license is:
1304
(a) valid at only one fixed business address;
1305
(b) valid for three years;
1306
(c) valid only for a physical location; and
1307
(d) renewable if a licensee meets the criteria for licensing described in Subsection (1).
1308
(3)(a) The commission shall require a retailer that is responsible under this part for the
1309
collection of tax on a [cannabinoid] specialized product to post a bond.
1310
(b) Subject to Subsection (3)(c), the commission shall determine the form and amount of
1311
the bond.
1312
(c) The minimum amount of the bond shall be $500.
1313
(4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Authority,
1314
the commission may make rules to establish the additional information described in
1315
Subsection (1)(c) that a retailer shall provide in the application described in Subsection
1316
(1).
1317
(5) The commission may not charge a fee for a license under this section.
1318
(6) The license under this section is in addition to a license required under Section
1319
4-41-103.3.
1320
(7)(a) The commission shall maintain a public list that includes the identity of each [
- 39 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
1321
person ] retailer licensed under this section.
1322
(b) The list shall:
1323
(i) include the type of license possessed; and
1324
(ii) be updated by the commission at least once per quarter.
1325
Section 10. Section 59-31-301 is amended to read:
1326
59-31-301 (Effective 01/01/26). Taxation of specialized product.
1327
(1) A tax is imposed on a [cannabinoid] specialized product at a rate of [.10 ] 5.3%
1328
multiplied by the retail price.
1329
(2)(a) A licensee shall collect the tax imposed under Subsection (1) from a purchaser at
1330
the time the [cannabinoid] specialized product is sold.
1331
(b) A consumer that purchases or receives an untaxed [cannabinoid] specialized product
1332
shall pay the tax at the time the [cannabinoid] specialized product is first received in
1333
this state.
1334
Section 11. Section 59-31-302 is amended to read:
1335
59-31-302 (Effective 01/01/26). Remittance of tax.
1336
(1)(a) The licensee that collects the tax imposed on a [cannabinoid] specialized product
1337
shall remit to the commission, in an electronic format approved by the commission:
1338
(i) the tax due in the previous quarter; and
1339
(ii) the tax return.
1340
(b) The tax collected and the return are due on or before the last day of April, July,
1341
October, and January.
1342
(2) A licensee that sells a [cannabinoid] specialized product to a purchaser shall maintain
1343
records to determine the amount of tax due under this part for a period of three years.
1344
(3)(a) A consumer that receives or purchases an untaxed [cannabinoid] specialized
1345
product for use or other consumption shall:
1346
(i) file with the commission, on a form provided by the commission, a statement
1347
showing the quantity and description of the [cannabinoid] specialized product
1348
subject to tax under this part; and
1349
(ii) pay the tax imposed by this part on the [cannabinoid] specialized product.
1350
(b) The consumer shall file the statement described in Subsection (3)(a) and pay the tax
1351
due on or before the last day of the month immediately following the month during
1352
which the consumer purchased an untaxed [cannabinoid] specialized product.
1353
(c) A consumer shall maintain records necessary to determine the amount of tax the
1354
consumer is liable to pay under this part for a period of three years after the day on
- 40 - 03-03 14:01 3rd Sub. (Cherry) H.B. 509
1355
which the consumer filed the statement required by this section.
1356
(4) A tourist who imports an untaxed [cannabinoid] specialized product into the state does
1357
not need to file the statement described in Subsection (3) or pay the tax if the [
1358
cannabinoid] specialized product is for the tourist's own use or consumption while in this
1359
state.
1360
(5) In addition to the tax required by this part, a [person] retailer shall pay a penalty as
1361
provided in Section 59-1-401, plus interest at the rate and in the manner [provide]
1362
provided in Section 59-1-402, if a [person] retailer subject to this section fails to:
1363
(a) pay the tax imposed by this part;
1364
(b) pay the tax on time; or
1365
(c) file a return or statement required by this part.
1366
(6) An overpayment of a tax imposed by this part shall accrue interest at the rate and in the
1367
manner provided in Section 59-1-402.
1368
(7)(a) The commission shall retain and deposit an administrative charge in accordance
1369
with Section 59-1-306 from revenue generated by the tax under this part.
1370
(b) The commission shall deposit [47% of the revenue generated by the tax imposed by
1371
this part into the General Fund and the remaining] the revenue generated by the tax
1372
imposed under this part into the [Cannabinoid] Specialized Product Proceeds
1373
Restricted Account created in Section 59-31-401.
1374
Section 12. Section 59-31-401 is amended to read:
1375
59-31-401 (Effective 01/01/26). Specialized Product Proceeds Restricted Account.
1376
(1) There is created within the General Fund a restricted account known as the "[
1377
Cannabinoid] Specialized Product Proceeds Restricted Account."
1378
(2) The [Cannabinoid] Specialized Product Proceeds Restricted Account consists of:
1379
(a) revenue collected from the tax imposed by Section 59-31-301; and
1380
(b) amounts appropriated by the Legislature.
1381
(3) Subject to appropriation, money in the account may be used for any of the following:
1382
(a) enforcement [of] and performance of duties described in Title 4, Chapter 41, Hemp
1383
and Cannabinoid Act, by the Department of Agriculture and Food;
1384
(b) enforcement and performance of duties described in Title 4, Chapter 45, Kratom
1385
Consumer Protection Act, by the Department of Agriculture and Food;
1386
[(b)] (c) investigations described in Section 77-39-101, regarding cannabinoid products;
1387
and
1388
[(c)] (d) the Industrial Hemp Grant Program created in Section 63N-3-1302[; and] .
- 41 - 3rd Sub. (Cherry) H.B. 509 03-03 14:01
1389
[(d) provided to counties, cities, and towns in proportion to the county's, city's, or town's
1390
distribution under Section 59-12-205 for the preceding fiscal year.]
1391
Section 13. Section 59-31-402 is amended to read:
1392
59-31-402 (Effective 01/01/26). Report to Department of Agriculture and Food of
1393
illegal specialized product.
1394
If the commission suspects that a [cannabinoid] specialized product is being sold in the
1395
state in violation of a law other than a law described in this chapter, the commission shall
1396
report the name and tax identification number of the seller and the [cannabinoid] specialized
1397
product:
1398
(1) to the Department of Agriculture and Food; and
1399
(2) within 30 days after the day on which the commission becomes aware of the sale.
1400
Section 14. Effective Date.
1401
(1) Except as provided in Subsection (2), this bill takes effect January 1, 2026.
1402
(2) The actions affecting the following sections take effect on May 7, 2025:
1403
(a) Section 4-45-102 (Effective 05/07/25); and
1404
(b) Section 4-45-104 (Effective 05/07/25).
- 42 -