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                  SB 50
              SALES TAX ON TAXICAB AMENDMENTS
              1996 GENERAL SESSION
              STATE OF UTAH
              Sponsor: Charles H. Stewart
          AN ACT RELATING TO THE SALES AND USE TAX ACT; CREATING A SALES TAX
          EXEMPTION FOR INTRASTATE MOVEMENTS OF PEOPLE BY TAXICABS; MAKING
          TECHNICAL CORRECTIONS; AND PROVIDING AN EFFECTIVE DATE.
          This act affects sections of Utah Code Annotated 1953 as follows:
          AMENDS:
          59-12-104 , as last amended by Chapters 27, 100, 190, 195, 279, 290, 318, and 327, Laws of
          Utah 1995
          Be it enacted by the Legislature of the state of Utah:
              Section 1. Section 59-12-104 is amended to read:
              59-12-104. Exemptions.
              The following sales and uses are exempt from the taxes imposed by this chapter:
              (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
          under Title 59, Chapter 13, Motor and Special Fuel Tax Act;
              (2) through December 31, 1995, sales to the state, its institutions, and its political
          subdivisions, except sales of construction materials however, construction materials purchased by
          the state, its institutions, or its political subdivisions which are installed or converted to real
          property by employees of the state, its institutions, or its political subdivisions are exempt;
              (3) beginning January 1, 1996, sales to the state, its institutions, and its political
          subdivisions; however, this exemption does not apply to sales of construction materials except:
              (a) construction materials purchased by or on behalf of institutions of the public education
          system as defined in Utah Constitution Article X, Section 2, provided the construction materials
          are clearly identified and segregated and installed or converted to real property which is owned by
          institutions of the public education system; and
              (b) construction materials purchased by the state, its institutions or its political
          subdivisions which are installed or converted to real property by employees of the state, its
          institutions, or its political subdivisions;
              (4) sales of food, beverage, and dairy products from vending machines in which the proceeds
          of each sale do not exceed $1 if the vendor or operator of the vending machine reports an amount
          equal to 150% of the cost of items as goods consumed;
              (5) sales of food, beverage, dairy products, similar confections, and related services to
          commercial airline carriers for in-flight consumption;
              (6) sales of parts and equipment installed in aircraft operated by common carriers in
          interstate or foreign commerce;
              (7) sales of commercials, motion picture films, prerecorded audio program tapes or records,
          and prerecorded video tapes by a producer, distributor, or studio to a motion picture exhibitor,
          distributor, or commercial television or radio broadcaster;
              (8) sales made through coin-operated laundry machines that are:
              (a) located in multiple dwelling units;
              (b) used exclusively for the benefit of tenants; and
              (c) not available for use by the general public;
              (9) sales made to or by religious or charitable institutions in the conduct of their regular
          religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
          fulfilled;
              (10) sales of vehicles of a type required to be registered under the motor vehicle laws of this
          state which are made to bona fide nonresidents of this state and are not afterwards registered or used
          in this state except as necessary to transport them to the borders of this state;
              (11) sales of medicine;
              (12) sales or use of property, materials, or services used in the construction of or
          incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
              (13) sales or use of property which the state is prohibited from taxing under the Constitution
          or laws of the United States or under the laws of this state;
              (14) sales of meals served by:
              (a) public elementary and secondary schools;

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              (b) churches, charitable institutions, and institutions of higher education, if the meals are not
          available to the general public; and
              (c) inpatient meals provided at medical or nursing facilities;
              (15) isolated or occasional sales by persons not regularly engaged in business, except the
          sale of vehicles or vessels required to be titled or registered under the laws of this state in which case
          the tax is based upon:
              (a) the bill of sale or other written evidence of value of the vehicle or vessel being sold; or
              (b) in the absence of a bill of sale or other written evidence of value, the then existing fair
          market value of the vehicle or vessel being sold as determined by the commission;
              (16) (a) sales or leases of machinery and equipment purchased or leased by a manufacturer
          on or after July 1, 1995 for:
              (i) use in new or expanding operations related to the manufacturing process in any
          manufacturing facility in Utah;
              (A) manufacturing facility means an establishment described in SIC Codes 2000 to 3999 of
          the 1987 Standard Industrial Classification Manual, of the federal Executive Office of the President,
          Office of Management and Budget;
              (B) for purposes of this subsection, the commission shall by rule define the terms "new or
          expanding operations" and "establishment";
              (ii) normal operating replacements, which [includes] include replacement machinery and
          equipment in any manufacturing facility in Utah, at the following rate:
              (A) for taxable years beginning July 1, 1996, 30% of the exemption shall be allowed;
              (B) for taxable years beginning July 1, 1997, 60% of the exemption shall be allowed; and
              (C) for taxable years beginning July 1, 1998, 100% of the exemption shall be allowed[.];
              (b) by October 1, 1991, and every five years thereafter, the commission shall review these
          exemptions and make recommendations to the Revenue and Taxation Interim Committee concerning
          whether the exemptions should be continued, modified, or repealed. In its report to the Revenue and
          Taxation Interim Committee, the tax commission review shall include at least:
              (i) the cost of the exemptions;

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              (ii) the purpose and effectiveness of the exemptions; and
              (iii) the benefits of the exemptions to the state;
              (17) sales of tooling, special tooling, support equipment, and special test equipment used or
          consumed exclusively in the performance of any aerospace or electronics industry contract with the
          United States government or any subcontract under that contract, but only if, under the terms of that
          contract or subcontract, title to the tooling and equipment is vested in the United States government
          as evidenced by a government identification tag placed on the tooling and equipment or by listing
          on a government-approved property record if a tag is impractical;
              (18) intrastate movements of:
              (a) freight by common carriers; and
              (b) people by taxicabs as described in SIC Code 4121 of the Standard Industrial
          Classification Manual of the federal Executive Office of the President, Office of Management and
          Budget;
              (19) sales of newspapers or newspaper subscriptions;
              (20) tangible personal property, other than money, traded in as full or part payment of the
          purchase price, except that for purposes of calculating sales or use tax upon vehicles not sold by a
          vehicle dealer, trade-ins are limited to other vehicles only, and the tax is based upon:
              (a) the bill of sale or other written evidence of value of the vehicle being sold and the vehicle
          being traded in; or
              (b) in the absence of a bill of sale or other written evidence of value, the then existing fair
          market value of the vehicle being sold and the vehicle being traded in, as determined by the
          commission;
              (21) sprays and insecticides used to control insects, diseases, and weeds for commercial
          production of fruits, vegetables, feeds, seeds, and animal products, but not those sprays and
          insecticides used in the processing of the products;
              (22) (a) sales of tangible personal property used or consumed primarily and directly in
          farming operations, including sales of irrigation equipment and supplies used for agricultural
          production purposes, whether or not they become part of real estate and whether or not installed by

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          farmer, contractor, or subcontractor, but not sales of:
              (i) machinery, equipment, materials, and supplies used in a manner that is incidental to
          farming, such as hand tools with a unit purchase price not in excess of $250, and maintenance and
          janitorial equipment and supplies;
              (ii) tangible personal property used in any activities other than farming, such as office
          equipment and supplies, equipment and supplies used in sales or distribution of farm products, in
          research, or in transportation; or
              (iii) any vehicle required to be registered by the laws of this state, without regard to the use
          to which the vehicle is put;
              (b) sales of hay;
              (23) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or other
          agricultural produce if sold by a producer during the harvest season;
              (24) purchases of food made with food stamps;
              (25) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
          nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor, wholesaler,
          or retailer for use in packaging tangible personal property to be sold by that manufacturer, processor,
          wholesaler, or retailer;
              (26) property stored in the state for resale;
              (27) property brought into the state by a nonresident for his or her own personal use or
          enjoyment while within the state, except property purchased for use in Utah by a nonresident living
          and working in Utah at the time of purchase;
              (28) property purchased for resale in this state, in the regular course of business, either in
          its original form or as an ingredient or component part of a manufactured or compounded product;
              (29) property upon which a sales or use tax was paid to some other state, or one of its
          subdivisions, except that the state shall be paid any difference between the tax paid and the tax
          imposed by this part and Part 2, and no adjustment is allowed if the tax paid was greater than the tax
          imposed by this part and Part 2;
              (30) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a person

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          for use in compounding a service taxable under the subsections;
              (31) purchases of food made under the WIC program of the United States Department of
          Agriculture;
              (32) sales or leases made before June 30, 1996, of rolls, rollers, refractory brick, electric
          motors, and other replacement parts used in the furnaces, mills, and ovens of a steel mill described
          in SIC Code 3312 of the 1987 Standard Industrial Classification Manual, of the federal Executive
          Office of the President, Office of Management and Budget;
              (33) sales of boats of a type required to be registered under Title 73, Chapter 18, State
          Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of this
          state and are not thereafter registered or used in this state except as necessary to transport them to
          the borders of this state;
              (34) sales of tangible personal property to persons within this state that is subsequently
          shipped outside the state and incorporated pursuant to contract into and becomes a part of real
          property located outside of this state, except to the extent that the other state or political entity
          imposes a sales, use, gross receipts, or other similar transaction excise tax on it against which the
          other state or political entity allows a credit for taxes imposed by this chapter;
              (35) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah where
          a sales or use tax is not imposed, even if the title is passed in Utah;
              (36) until July 1, 1999, amounts paid for purchase of telephone service for purposes of
          providing telephone service;
              (37) fares charged to persons transported directly by a public transit district created under
          the authority of Title 17A, Chapter 2, Part 10, Public Transit Districts;
              (38) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
              (39) until July 1, 2000, 45% of the sales price of any new manufactured home and 100% of
          the sales price of any used manufactured home;
              (40) sales by fundraisers, as defined in Subsection 59-12-102 (6), by public and private
          schools, grades K through 12; and
              (41) sales or rentals of home medical equipment supplies:

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              (a) purchased or leased by, for, or on behalf of a home patient; and
              (b) used personally and exclusively by the patient in the medical treatment of an existing
          disease or injury.
              Section 2. Effective date.
              This act takes effect on July 1, 1996.

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