Utah State Bulletin, January 15, 2012, Vol. 2012, No. 2

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FIVE-YEAR NOTICES OF REVIEW AND STATEMENTS OF CONTINUATION DAR File No. 35606establish the delivered value and the point of sale of taxableenergy. Section 10-1-307 establishes a method for collectionof municipal energy sales and use tax by the TaxCommission; provides circumstances under which an energysupplier shall pay the tax directly to a municipality. Section10-1-405 requires the commission to collect the municipaltelecommunications license tax pursuant to a uniforminterlocal agreement between the municipalities that imposethe tax and the commission; requires commission to developthe uniform interlocal agreement by rule. Section 19-6-808provides guidelines for payment of the waste tire recyclingfee. Section 59-12-102 defines terms used in the Sales andUse Tax Act. Section 59-12-103 establishes a sales and usetax base, the state sales tax rate, and earmarking of certainsales tax revenues. Section 59-12-104 lists sales and usesthat are exempt from sales and use tax. Section 59-12-104.1exempts sales made by or to religious or charitableorganizations from sales and use tax law. Law provides thatthe exemption shall, with exceptions, be administered as arefund; requires Tax Commission to promulgate refundprocedures by rule. Section 59-12-105 requires certainexempt sales to be reported to the Tax Commission by theowner or purchaser. Provides penalties for failure to reportthese exempt sales and gives the Tax Commission the rightto waive, reduce, or compromise the penalties. Section 59-12-106 requires all persons required by law to collect salesand use tax to have a license issued by the Tax Commission,prior to the collection of tax; requires vendors to obtain anexemption certificate at the time of sale to evidence the salequalifies for an exemption. Section 59-12-107 requires eachvendor with nexus in this state to collect and remit sales anduse tax to the Tax Commission, on forms prescribed by theTax Commission; allows Tax Commission to require security.Law also provides credits for prepaid sales and use tax, andprovides penalties for violation of law. Section 59-12-108requires any vendor whose annual tax liability exceeds$50,000 for the previous year to file with the Tax Commissionon a monthly basis; requires vendors whose annual taxliability exceeds $96,000 for the previous year to file monthlytax returns by electronic funds transfer; allows vendorsrequired to file monthly to retain a portion of the sales tax theycollect; gives Tax Commission rulemaking power for theprocedures necessary to determine tax liability for purposesof this section. Section 59-12-109 establishes thatconfidentiality of sales and use tax returns and otherinformation filed with the Tax Commission is governed bySection 59-1-403. Section 59-12-111 requires all Utahvendors holding a state sales tax license to keep accuraterecords of all sales made for a period of three years. Lawrequires them to be accessible to authorized Tax Commissionemployees upon request. Section 59-12-112 creates a taxlien on any unpaid sales taxes when a business is sold;clarifies the liability of the purchaser of the business when theprevious owner has not paid the sales tax. Section 59-12-118grants the commission exclusive authority to administer,operate, and enforce the provisions of Chapter 12, Sales andUse Tax Act; includes a grant of rulewriting authority toenforce the chapter. Section 59-12-211 requires thecommission to promulgate a rule that indicates how todetermine the location of a transaction for the use ofcomputer software at more than one location. Section 59-12-301 allows a county legislative body to impose a transientroom tax for every occupancy of public accommodations.Section 59-12-352 allows a municipality to impose amunicipal transient room tax for every occupancy of publicaccommodations. Section 59-12-353 allows a municipality toimpose an additional transient room tax for every occupancyof public accommodations to repay bonded or otherindebtedness. Section 59-12-1102 allows a county to imposean additional sales and use tax on all taxable transactions;sets forth the procedures a county must follow in order toimpose the tax; provides for the distribution of the revenuecollected from the imposition of this tax.SUMMARY OF WRITTEN COMMENTS RECEIVED DURINGAND SINCE THE LAST FIVE YEAR REVIEW OF THE RULEFROM INTERESTED PERSONS SUPPORTING OROPPOSING THE RULE: None.REASONED JUSTIFICATION FOR THE CONTINUATION OFTHE RULE, INCLUDING REASONS WHY THE AGENCYDISAGREES WITH COMMENTS IN OPPOSITION TO THERULE, IF ANY: Section R865-19S-1 distinguishes betweensales and use taxes. Section R865-19S-2 describes salesand use taxes as transaction taxes rather than taxes onarticles sold; explains that purchaser pays the tax, not thevendor. The vendor merely remits the tax to the state.Section R865-19S-4 indicates that, unless otherwise providedby statute, an invoice or receipt shall show sales tax as aseparate line item or in the underlying books and records keptin the vendor's ordinary course of business. If vendors collectan excess amount of tax, they must refund the tax tocustomers or remit excesses to Tax Commission. Indicatescircumstances under which an over collection of taxes maybe offset against an under collection of taxes. Section R865-19S-7 explains sales tax license requirements for businesses.Outlines rules for business address changes and businessclosures. Section R865-19S-12 prescribes the basic form forvendor tax returns. Outlines commission rules for timely filingand extensions. Distinguished between annual filing statusand quarterly filing status requirement. Explains alternativesales tax deposits (daily, weekly, or monthly) if necessary forthe remittance of tax. Section R865-19S-13 explainsconfidentiality of returns and states that persons requesting acopy of their own tax returns must present properidentification. Section R865-19S-16 clarifies vendorprocedure when vendor has collected excess taxes. SectionR865-19S-20 defines the term "total sales" for sales taxpurposes. Enumerates the circumstances under which theTax Commission will give adjustments and credits. Vendorcommissions are not deductible. Section R865-19S-22describes the proper method of sales and use tax recordkeeping for retailers, lessees, and lessors. Discusses propermicrofilm and microfiche methods and ADP accountingsystem records. Explains Tax Commission prerogatives ifrecords are not prepared and maintained in the prescribedmanner. Section R865-19S-23 describes the exemptioncertificate requirement for vendors of exempt tangible134 UTAH STATE BULLETIN, January 15, 2012, Vol. 2012, No. 2
DAR File No. 35606FIVE-YEAR NOTICES OF REVIEW AND STATEMENTS OF CONTINUATIONpersonal property. Section R865-19S-25 requires sales taxlicense holders to return tax licenses for cancellation uponsales of business. Requires sales tax license holders toretain business records for three years after discontinuationof business. Section R865-19S-30 lists the evidence requiredfor calculating sales and use tax for vehicle sales with orwithout a trade-in vehicle used as partial payment. SectionR865-19S-31 time and place of sale determined by contractbetween seller and buyer. The intent of the parties is subjectto generally accepted contract law. Section R865-19S-32explains sales tax implications for leases, rentals, andconditional sales leases. Provides examples of taxableleases. Section R865-19S-33 defines "admissions," "annualmembership dues," and "season passes;" clarifies what is notan admission; states that amounts paid for activities that arenot admissions must be separately stated on the invoice.Section R865-19S-34 defines "place of amusement" as adefinite location. Admission is subject to tax even though thecharge includes the right to participate in an activity. SectionR865-19S-35 clarifies definition of "residential use" to includenursing homes. Definition of "fuels" does not includeexplosives. Taxable status of fuel furnished through a singlemeter is determined by its predominant use. Section R865-19S-37 defines "commercials," "audio tapes," "video tapes,""motion picture exhibitor," and "distributor." Section R865-19S-38 clarifies definition of "isolated or occasional" sales.Section R865-19S-40 sales tax exemption for agriculturalproduce/agricultural products exchanges explained. SectionR865-19S-41 clarifies, for purposes of the sales taxexemption for the U. S. government, when a sale is made tothe U. S. government. Section R865-19S-42 clarifies when asale is made to "state of Utah" for exemption purposes.Section R865-19S-43 outlines exemption qualificationrequirements for religious or charitable institutions. SectionR865-19S-44 explains meaning of "sales made in interstatecommerce." Section R865-19S-48 explains that returnablecontainers are not exempt from sales tax (although nonreturnablecontainers are). Containers sold for final use tothe consumer are not exempt. Deposits on containers aresubject to sales tax; retailer may take tax credit if depositrefund is made to customer. Section R865-19S-49 defines"farming operations" for purposes of the agriculturalexemption; food, medicine, and supplies for animals inagricultural use exempt from sales tax. Fur bearing animalsraised for fur are exempt agricultural products. Theseexemptions are only applicable to commercial farmingoperations. Purchaser must supply exemption certificate tovendor. Explains that poultry, eggs, and dairy products arenot seasonal products under Subsection 59-12-104 (21).Section R865-19S-50 defines flowers, trees bouquets, plants,etc. as agricultural products. Explains tax rules for floristtelegraphic deliveries. Florist receiving the order from thebuyer must collect tax. Section R865-19S-51 clarifies taxrules for manufacturing and assembling labor on tangiblepersonal property. Sale of the personal property itself is notexempt unless specifically exempted. Section R865-19S-53sales by finance companies of tangible personal propertyacquired by repossession or foreclosure are subject to tax.Section R865-19S-54 explains governmental sales taxexemption and lists state and federal governmental entitiesexempt from tax. Section R865-19S-56 explains that salesby employers to employees are generally subject to sales tax.Section R865-19S-57 retail sales of ice are taxable. Ice to bere-sold is not taxable. Contract sales of ice to railroads orfreight lines are taxable; no deduction for services is allowed.Section R865-19S-58 explains that construction materials aretaxable to contractor or repairman if contractor or repairmanconverts them to real property. Defines "constructionmaterials." Sales of materials to contractors are taxable; saleof completed real property is not. Contractor is the finalconsumer when contractor converts tangible personalproperty to real property. Defines conditions under whichsales of construction materials to religious or charitableinstitutions are exempt. Provides examples of items thatremain tangible personal property even when attached to realproperty (and hence are taxable). Section R865-19S-59defines sales of tangible personal property to repair personsor renovators as "for resale" sales, and there- fore exempt.Sales of supplies consumed by repair persons or renovatorsare taxable. Section R865-19S-60 explains that items sold tobusinesses for use in carrying on business are taxable.Gives examples of office supplies, trade fixtures, etc. that aresubject to tax. Section R865-19S-61 clarifies definition of taxexempt meal sales. Meals available to general public notexempt. Defines "available to general public." Section R865-19S-62 meal tickets, coupon books, and merchandise cards,sold by persons engaged in selling those items, are taxable.Explains collection procedure. Section R865-19S-63 definestombstones and grave markers as improvements to realproperty. Defines tax rules for sales of these items. SectionR865-19S-65 clarifies tax rules for newspaper sales. Defines"newspaper" for tax exemption purposes. Explains rules foradvertising inserts. Section R865-19S-66 distinguishesbetween services rendered and tangible personal propertysold by optometrists, ophthalmologists, and opticians.Services are not taxable, but sales of the tangible personalproperty are taxable. Section R865-19S-68 definespremiums, gifts, rebates, and coupons as taxable tangiblepersonal property. Explains tax rules for donations of theseitems. Section R865-19S-70 defines persons who renderservices (doctors, dentists, barbers, or beauticians) as theconsumers of the tangible personal property dispensedduring their services. Section R865-19S-72 explains salestax exemption for trade-ins and exchanges of tangiblepersonal property. Section R865-19S-73 explains theresponsibility of trustees, receivers, executors, administrators,etc. of collecting and remitting sales tax on all taxable sales,including those made at liquidation. Section R865-19S-74defines vending machine operators as retailers. Defines"cost" for the purposes of the 150% cost formula in Section59-12-104(3). Requires vending machine operators to securea sales tax license and to display license number on eachvending machine. Section R865-19S-75 defines sales byphotographers, photofinishers, and photostat producers assales of tangible personal property. Requires these personsto collect tax on their services and on sales of related tangiblepersonal property. Section R865-19S-76 defines charges forpainting, polishing, washing, cleaning, and waxing tangibleUTAH STATE BULLETIN, January 15, 2012, Vol. 2012, No. 2 135
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Utah State Bulletin, January 15, 2012, Vol. 2012, No. 2

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