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. 35606personal property as subject to tax, with no deduction allowedfor the service involved. Explains that sales of items used inproviding these services are subject to tax. Section R865-19S-78 explains that labor charges for installation, repair,renovation, and cleaning of tangible personal property aretaxable; labor charges for installation of tangible personalproperty that becomes real property are not subject to tax.(Clarifies Subsection 59-12-103(1)(g)). Section R865-19S-79defines "tourist home," "hotel," "motel," "trailer court," "trailer,"and "accommodations and service charges." Section R865-19S-80 Defines "Pre-press materials" and "printer."Describes sales tax liability for sales and purchases made byprinters. Section R865-19S-81 explains that the sale ofartwork is taxable. Purchase of art supplies that become partof the finished product may be purchased tax free. SectionR865-19S-82 outlines sales tax rules for items used fordisplay, trial, or demonstration. Tangible personal propertyused for display, trial, or demonstration is not subject to tax.Demonstration items used primarily for company or personaluse are subject to tax. Section R865-19S-83 describesprocedure for tax reimbursement of purchases forconstruction of pollution control facilities. Provides that aftera pollution control facility is certified qualifying purchasesshould be made tax exempt. Section R865-19S-85 defines"establishment," "machinery and equipment" and"manufacturer," for the purpose of the exemption for new andexpanding operations and normal operating replacements;indicates when different activities performed at a singlelocation constitute a separate and distinct establishment.Section R865-19S-86 outlines procedures for mandatoryfilers, defines "mandatory filer" and related terms; describescriteria for vendor reimbursement of the cost of collecting andremitting sales taxes. Delineates procedures for ElectronicFunds Transfer (EFT) remittance of sales taxes. SectionR865-19S-87 defines "tooling," "special tooling," "supportequipment," and "special test equipment" for purposes of theaerospace or electronics industry contract exemption set forthin Section 59-12-104. Section R865-19S-90 defines"interstate," "intrastate," and "two-way transmission" forpurposes of Section 59-12-103. Enumerates taxabletelephone services and gives examples of nontaxablecharges. Section R865-19S-91 explains that sales togovernment contractors are subject to sales tax if thecontractor uses or consumes the property. Lists criteria forqualification as a purchasing agent for a government entity.Section R865-19S-92 defines "computer generated output;"indicates that prewritten computer software is subject to salestax regardless of the form in which it is transferred; indicatesthat custom computer software is exempt from sales taxregardless of the form in which it is transferred. SectionR865-19S-93 describes procedure for payment of waste tirerecycling fees and clarifies what sales of tires are subject tothe fee. Section R865-19S-94 distinguishes between taxableand non-taxable tips, gratuities, and cover charges atrestaurants, cafes, and clubs. Section R865-19S-96 outlinesassessment of the transient room tax. Section R865-19S-98defines "use" for purposes of vehicle sales tax exemption fornonresidents. Describes qualifications for nonresident status.Describes qualifications for vehicles deemed not used in thisstate. Section R865-19S-99 explains that vehicles purchasedin another state are exempt from Utah sales tax if sales taxhas been paid in another state. Registration card fromanother state serves as evidence of such payment. SectionR865-19S-100 explains procedures for sales tax exemptionsand refunds for religious and charitable organizations.Section R865-19S-101 explains that document preparationfees assessed for motor vehicle sales are exempt from salestax if separately identified and not included in the vehicle saleprice. Section R865-19S-102 states that ski resorts that donot have a separate meter for their exempt purchases shalldetermine a methodology to calculate exempt electricitypurchases, and to receive Tax Commission approval prior tousing that methodology. Section R865-19S-103 defines "gas"and "supplying taxable energy" for purposes of the municipalenergy sales and use tax. Also defines "delivered value" and"point of sale" of taxable energy. Sets forth responsibilities ofan energy supplier and a user of taxable energy. SectionR865-19S-104 clarifies that the annual distribution of thecounty option sales tax shall be based on a calendar year;adjustments shall be reflected in the February distribution.Section R865-19S-108 defines "user fee" for purposes ofsales and use tax on admission or user fees. Section R865-19S-109 distinguishes between the taxable and non-taxablestatus of purchases and sales made by a veterinarian;provides that if a sale by a veterinarian includes both taxableand nontaxable items, the nontaxable items must beseparately stated or the entire invoice is subject to tax.Section R865-19S-110 defines "advertiser." Clarifies taxablestatus of purchases and sales made by advertisers. SectionR865-19S-111 clarifies when a graphic design service is nontaxable;provides that a vendor who provides both nontaxablegraphic design services and taxable tangible personalproperty must separately state nontaxable amounts or theentire sale is taxable. Section R865-19S-113 defines "federalairway;" indicates when amounts paid for aircraft or watercrafttours are exempt from sales tax; indicates when sales taxshall be collected in Utah for a service that occurs in Utahand another state. Section R865-19S-114 defines items thatconstitute clothing in accordance with the Streamlined Salesand Use Tax Agreement. Section R865-19S-115 definesitems that constitute protective equipment in accordance withthe Streamlined Sales and Use Tax Agreement. SectionR865-19S-116 defines items that constitute sports orrecreational equipment in accordance with the StreamlinedSales and Use Tax Agreement. Section R865-19S-117provides guidelines for rounding the computation of sales tax.Section R865-19S-118 provides the terms of the uniforminterlocal agreement that governs the commission'sadministration of the municipal telecommunications licensetax. Section R865-19S-120 defines terms for the sales taxexemption relating to film, television, and video; indicatestransactions that do not qualify for the sales tax exemption.Section R865-19S-121 defines terms for purposes of thesales tax exemption for certain purchases by a mining facility;indicates the items the exemption applies to. Section R865-19S-122 defines terms for purposes of the sales taxexemption for certain purchases by a web search portalestablishment; indicates the items the exemption applies to.136 UTAH STATE BULLETIN, January 15, 2012, Vol. 2012, No. 2
DAR File No. 35606FIVE-YEAR NOTICES OF REVIEW AND STATEMENTS OF CONTINUATIONTherefore, this rule should be continued.THE FULL TEXT OF THIS RULE MAY BE INSPECTED,DURING REGULAR BUSINESS HOURS, AT:TAX COMMISSIONAUDITING210 N 1950 WSALT LAKE CITY, UT 84134or at the Division of Administrative Rules.DIRECT QUESTIONS REGARDING THIS RULE TO:♦ Christa Johnson by phone at 801-297-3901, by FAX at 801-297-3907, or by Internet E-mail at cj@utah.govAUTHORIZED BY: Michael Cragun, Tax CommissionerEFFECTIVE: 01/03/2012Tax Commission, AuditingR865-20TTobacco TaxFIVE-YEAR NOTICE OF REVIEW AND STATEMENTOF CONTINUATIONDAR FILE NO.: 35607FILED: 01/03/2012NOTICE OF REVIEW AND STATEMENT OFCONTINUATIONCONCISE EXPLANATION OF THE PARTICULARSTATUTORY PROVISIONS UNDER WHICH THE RULE ISENACTED AND HOW THESE PROVISIONS AUTHORIZEOR REQUIRE THE RULE: Section 59-14-102 defines termsfor purposes of cigarette and tobacco tax and licensing.Section 59-14-202 requires that cigarette licenses be issuedonly to a person owning or operating the place wherecigarette vending machine sales are made. Requires aseparate license for each location sales are made. Providesinstructions pertaining to license issuance. Section 59-14-203.5 requires the commission to suspend or revoke licensesto sell cigarettes upon notice that a licensee has soldcigarettes 3 or more times to a person under 19; indicatesthat a revocation shall last for one year. Section 59-14-204imposes a cigarette tax and provides the rates of the taximposed. States that the tax shall be imposed upon the firstpurchase of cigarettes in the state. Section 59-14-205provides that the cigarette tax shall be paid by affixing stampson cigarettes, unless otherwise provided in rule by the TaxCommission. Requires that all cigarettes sold in the state ofUtah be stamped within 72 hours of their receipt in the stateand prior to sale in Utah. Allows Tax Commission to draftrules allowing cigarettes to remain unstamped in the hands ofthe wholesaler or distributor under certain conditions. Lawalso gives the Tax Commission authority to create rules aidingin the enforcement and collection of cigarette tax. Section59-14-212 requires all manufacturers, distributors, or retailersthat affix a stamp to imported cigarettes to provide certaininformation to the Tax Commission regarding those importedcigarettes; indicates that the required information shall bereported on a quarterly basis; provides a penalty for failure tocomply. Section 59-14-301 requires all manufacturers,distributors, and retailers of tobacco products to register withthe Tax Commission. Requires persons subject to thissection to post a bond as a prerequisite to registering.Section 59-14-301.5 requires the commission to suspend orrevoke licenses to sell tobacco upon notice that a licenseehas sold tobacco 3 or more times to a person under 19;indicates that a revocation shall last for one year. Section 59-14-302 imposes a tax on the sale, use, or storage of tobaccoproducts in Utah. The tax is imposed on the first purchase ofthe product in Utah. Section 59-14-401 allows a refund ofcigarette tax on cigarettes and tobacco products sold outsideof the state of Utah to a regular dealer in these articles.Section 59-14-404 gives Tax Commission authority to enteron the premises of a taxpayer to examine books and paperspertaining to the cigarette or tobacco products tax, or tosecure any information directly or indirectly concerned withthe enforcement of Chapter 14. Section 59-14-603 requiresthe commission to publish in its website a directory ofcigarettes approved for stamping and sale in the state.Section 59-14-607 authorizes the commission to promulgaterules to enforce the cigarette and Tobacco Tax and LicensingAct.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 R865-20T-1 clarifies that thecigarette tax and tobacco products tax are imposed upon thefirst purchase, use, storage, or consumption in the state, andclarifies that no tax is due from a nonresident or tourist whopurchases cigarettes outside the state for use, storage, orconsumption inside the state. Section R865-20T-3 states thateach vending machine selling tobacco is to be licensed as aseparate place of business. The license will be posted in aconspicuous place on the machine. Rule also providesguidelines for application for license and to change the placeof business. Section R865-20T-5 sellers of tobacco productsnot required to post bond if previous seller has paid the tax onthe products; indicates how the amount of the bond shall becalculated. Section R865-20T-7 clarifies that sales ofcigarettes and tobacco products to vendors outside the stateare not subject to this tax. Rule also provides guidelines onrecords that must be maintained to evidence this exemption.Section R865-20T-8 requires manufacturers, jobbers,distributors, wholesalers, retailers, users, or consumers oftobacco products or cigarettes to keep records necessary todetermine the amount of tax due on the sale andconsumption of these products for a period of three years.Section R865-20T-9 allows inventories of cigarettes held byUTAH STATE BULLETIN, January 15, 2012, Vol. 2012, No. 2 137
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Page 165 and 166: RULES INDEXR162-2c-204 License Rene
Page 167 and 168: RULES INDEXR277-115 Copyrighting Ma
Page 169 and 170: RULES INDEXRehabilitationR280-204 U
Page 171 and 172: RULES INDEXR315-17 End of Life Auto
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Page 175 and 176: RULES INDEXR414-3A-2 Definitions 35
Page 177 and 178: RULES INDEXR432-950 Mammography Qua
Page 179 and 180: RULES INDEXR590-172-4 Rule 35006 AM
Page 181 and 182: RULES INDEXLIEUTENANT GOVERNORElect
Page 183 and 184: RULES INDEXR657-26 Adjudicative Pro
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Page 187 and 188: RULES INDEXR865-13G-17R865-14W-1R86
Page 189 and 190: RULES INDEXR909-19 Safety Regulatio
Page 191: RULES INDEXR986-700-714 CC Payment
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Utah State Bulletin, January 15, 2012, Vol. 2012, No. 2

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