Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 26 (2016GS)

Sponsor

Rep. McCay, D.

Final action

Governor Signed 3/22/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• repeals certain reports to and by the Revenue and Taxation Interim Committee;
• requires that certain reports be provided electronically to the committee;
• addresses requirements of reports made by the Governor's Office of Economic Development to the committee; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

REVENUE AND TAXATION INTERIM COMMITTEE REPORT
AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Daniel McCay
Senate Sponsor: 
Deidre M. Henderson
LONG TITLE
General Description:
This bill addresses reports to and by the Revenue and Taxation Interim Committee.
Highlighted Provisions:
This bill:
▸ repeals certain reports to and by the Revenue and Taxation Interim Committee;
▸ requires that certain reports be provided electronically to the committee;
▸ addresses requirements of reports made by the Governor's Office of Economic
Development to the committee; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
35A-5-306
, as enacted by Laws of Utah 2014, Chapter 315
59-1-213
, as enacted by Laws of Utah 2004, Chapter 176
59-1-304
, as last amended by Laws of Utah 2008, Chapter 382
59-2-303.1
, as last amended by Laws of Utah 2010, Chapter 131
59-2-1308.5
, as enacted by Laws of Utah 2011, Chapter 325
59-5-102
, as last amended by Laws of Utah 2013, Chapter 310
59-7-607
, as last amended by Laws of Utah 2006, Chapter 223
59-7-612
, as last amended by Laws of Utah 2012, Chapter 405
59-7-613
, as last amended by Laws of Utah 2011, Chapter 384
59-7-614.2
, as last amended by Laws of Utah 2015, Chapter 283
59-7-614.5
, as last amended by Laws of Utah 2015, Chapter 283
59-7-614.7
, as enacted by Laws of Utah 2012, Chapter 410
59-7-614.8
, as last amended by Laws of Utah 2015, Chapter 283
59-7-701
, as last amended by Laws of Utah 2009, Chapter 312
59-7-903
, as last amended by Laws of Utah 2015, Chapter 41
59-9-101
, as last amended by Laws of Utah 2011, Chapter 266
59-10-1002.1
, as last amended by Laws of Utah 2015, Chapters 30 and 41
59-10-1010
, as renumbered and amended by Laws of Utah 2006, Chapter 223
59-10-1012
, as last amended by Laws of Utah 2012, Chapter 405
59-10-1013
, as last amended by Laws of Utah 2011, Chapter 384
59-10-1029
, as enacted by Laws of Utah 2012, Chapter 410
59-10-1030
, as last amended by Laws of Utah 2015, Chapter 283
59-10-1107
, as last amended by Laws of Utah 2015, Chapter 283
59-10-1108
, as last amended by Laws of Utah 2015, Chapter 283
59-10-1304
, as last amended by Laws of Utah 2015, Chapters 30 and 41
59-12-103.1
, as last amended by Laws of Utah 2013, Chapter 150
59-12-104
, as last amended by Laws of Utah 2015, Chapters 11, 294, and 353
59-12-104.2
, as last amended by Laws of Utah 2009, Chapter 203
59-12-104.5
, as last amended by Laws of Utah 2012, Chapter 41
59-23-4
, as last amended by Laws of Utah 2010, Chapter 105
63M-4-505
, as enacted by Laws of Utah 2012, Chapter 410
63N-2-810
, as renumbered and amended by Laws of Utah 2015, Chapter 283
REPEALS:
59-26-110
, as enacted by Laws of Utah 2004, Chapter 300
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
35A-5-306
 is amended to read:
35A-5-306.
Report to the Legislature.
Beginning with the 2016 interim, the department shall [
report
] annually 
provide an
electronic report
 to the Economic Development and Workforce Services Interim Committee
and the Revenue and Taxation Interim Committee:
(1) on or before the November interim meeting; and
(2) on the amount of tax credits the department grants under this part.
Section 2. Section 
59-1-213
 is amended to read:
59-1-213.
Annual report on Internal Revenue Code changes.
The commission shall annually 
provide an electronic
 report to the Revenue and
Taxation Interim Committee on or before the October interim meeting concerning the impacts
of the reliance of this title on the Internal Revenue Code, including:
(1) any modification to the Internal Revenue Code that is likely to have a fiscal impact
on state revenues:
(a) that became effective:
(i) if the commission is preparing its initial report in accordance with this section,
during the previous calendar year; or
(ii) if the commission has prepared a previous report in accordance with this section,
after the most recent report prepared in accordance with this section; or
(b) that have been enacted and will become effective prior to the end of the calendar
year that begins January 1 following the current report prepared in accordance with this
section;
(2) the fiscal impacts a modification described in Subsection (1) may have on state
revenues; and
(3) statutory or administrative options to:
(a) implement the effects on this title of a modification described in Subsection (1); or
(b) change this title to prevent this title from implementing a modification described in
Subsection (1).
Section 3. Section 
59-1-304
 is amended to read:
59-1-304.
Definition -- Limitations on maintaining a class action that relates to a
tax or fee -- Requirements for a person to be included as a member of a class in a class
action -- Rulemaking authority -- Limitations on recovery by members of a class --
Severability.
(1) As used in this section, "tax or fee" means a tax or fee administered by the
commission.
(2) A class action that relates to a tax or fee may not be maintained in any court if a
claim sought by a representative party seeking to maintain the class action arises as a result of:
(a) a person collecting a tax or fee from the representative party if the representative
party is not required by law to pay the tax or fee; or
(b) any of the following that requires a change in the manner in which a tax or fee is
required to be collected or paid:
(i) an administrative rule made by the commission;
(ii) a private letter ruling issued by the commission; or
(iii) a decision issued by:
(A) the commission; or
(B) a court of competent jurisdiction.
(3) (a) A person may be included as a member of a class in a class action relating to a
tax or fee only if the person:
(i) exhausts all administrative remedies with the commission; and
(ii) requests in writing to be included as a member of the class.
(b) (i) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
the commission shall make rules to simplify and expedite the administrative remedies a person
shall exhaust as required by Subsection (3)(a).
(ii) The rules required by Subsection (3)(b)(i) may include rules providing for:
(A) expedited filing procedures and forms;
(B) consolidation of hearings procedures as may be reasonably needed to accommodate
potential inclusion of similarly situated persons; and
(C) the designation of test or sample cases to avoid multiple hearings.
[
(iii) The commission shall report to the Revenue and Taxation Interim Committee on
the status of the rules required by this Subsection (3)(b) on or before the October 2004 interim
meeting.
]
(4) Subject to Subsection (5), in a class action brought under this section against the
state or its political subdivisions in which members of the class are awarded a refund or credit
of a tax or fee by a court of competent jurisdiction, the total amount that may be recovered by
members of the class may not exceed the difference between:
(a) the sum of:
(i) the amount of the refund or credit awarded to members of the class; and
(ii) interest as provided in Section 
59-1-402
; and
(b) if awarded in accordance with Subsection (5), the sum of:
(i) reasonable costs; and
(ii) reasonable attorney fees.
(5) (a) For purposes of Subsection (4), at the discretion of the court, the court may
award:
(i) reasonable costs as determined by the court; and
(ii) reasonable attorney fees determined under Subsection (5)(b).
(b) Reasonable attorney fees awarded in a class action may not exceed a reasonable
hourly rate for work actually performed:
(i) as determined by the court; and
(ii) taking into account all facts and circumstances that the court considers reasonable.
(6) If any provision of this section, or the application of any provision of this section to
any person or circumstance is held unconstitutional or invalid by a court of competent
jurisdiction, the remainder of the section shall be given effect without the invalid provision or
application.
Section 4. Section 
59-2-303.1
 is amended to read:
59-2-303.1.
Mandatory cyclical appraisals.
(1) For purposes of this section:
(a) "Corrective action" includes:
(i) factoring pursuant to Section 
59-2-704
;
(ii) notifying the state auditor that the county failed to comply with the requirements of
this section; or
(iii) filing a petition for a court order requiring a county to take action.
(b) "Mass appraisal system" means a computer assisted mass appraisal system that:
(i) a county assessor uses to value real property; and
(ii) includes at least the following system features:
(A) has the ability to update all parcels of real property located within the county each
year;
(B) can be programmed with specialized criteria;
(C) provides uniform and equal treatment of parcels within the same class of real
property throughout the county; and
(D) annually updates all parcels of residential real property within the county using
accepted valuation methodologies as determined by rule.
(c) "Property review date" means the date a county assessor completes a detailed
review of the property characteristics of a parcel of real property in accordance with Subsection
(3)(a).
(2) (a) The county assessor shall annually update property values of property as
provided in Section 
59-2-301
 based on a systematic review of current market data.
(b) The county assessor shall conduct the annual update described in Subsection (2)(a)
by using a mass appraisal system on or before the following:
(i) for a county of the first class, January 1, 2009;
(ii) for a county of the second class, January 1, 2011;
(iii) for a county of the third class, January 1, 2014; and
(iv) for a county of the fourth, fifth, or sixth class, January 1, 2015.
(c) The county assessor and the commission shall jointly certify that the county's mass
appraisal system meets the requirements:
(i) described in Subsection (1)(b); and
(ii) of the commission.
(3) (a) In addition to the requirements in Subsection (2), the county assessor shall
complete a detailed review of property characteristics for each property at least once every five
years.
(b) The county assessor shall maintain on the county's computer system, a record of the
last property review date for each parcel of real property located within the county assessor's
county.
(4) (a) The commission shall take corrective action if the commission determines that:
(i) a county assessor has not satisfactorily followed the current mass appraisal
standards, as provided by law;
(ii) the sales-assessment ratio, coefficients of dispersion, or other statistical measures
of appraisal performance related to the studies required by Section 
59-2-704
 are not within the
standards provided by law; or
(iii) the county assessor has failed to comply with the requirements of this section.
(b) If a county assessor fails to comply with the requirements of this section for one
year, the commission shall assist the county assessor in fulfilling the requirements of
Subsections (2) and (3).
(c) If a county assessor fails to comply with the requirements of this section for two
consecutive years, the county will lose the county's allocation of the revenue generated
statewide from the imposition of the multicounty assessing and collecting levy authorized in
Sections 
59-2-1602
 and 
59-2-1603
.
(d) If a county loses its allocation of the revenue generated statewide from the
imposition of the multicounty assessing and collecting levy described in Subsection (4)(c), the
revenue the county would have received shall be distributed to the Multicounty Appraisal Trust
created by interlocal agreement by all counties in the state.
(5) (a) On or before July 1, 2008, the county assessor shall prepare a five-year plan to
comply with the requirements of Subsections (2) and (3).
(b) The plan shall be available in the county assessor's office for review by the public
upon request.
(c) The plan shall be annually reviewed and revised as necessary.
(6) [
(a)
] A county assessor shall create, maintain, and regularly update a database
containing the following information that the county assessor may use to enhance the county's
ability to accurately appraise and assess property on an annual basis:
[
(i)
] 
(a)
 fee and other appraisals;
[
(ii)
] 
(b)
 property characteristics and features;
[
(iii)
] 
(c)
 property surveys;
[
(iv)
] 
(d)
 sales data; and
[
(v)
] 
(e)
 any other data or information on sales, studies, transfers, changes to property,
or property characteristics.
[
(b) A county assessor shall submit a report to the commission on or before September
stating the progress of the county assessor to meet the requirements of Subsection (6)(a).
]
[
(c) The commission shall report to the Revenue and Taxation Interim Committee on
or before the October interim meeting concerning the information received from the county
assessors pursuant to Subsection (6)(b).
]
Section 5. Section 
59-2-1308.5
 is amended to read:
59-2-1308.5.
Equal payment agreements.
(1) (a) The commission may enter into an agreement with a commercial or industrial
taxpayer to provide for equal, or approximately equal, property tax payments over a reasonable
period of years, not to exceed 20 years, if:
(i) the payment schedule is based on an accepted valuation methodology that
reasonably estimates the property's anticipated fair market value over the period of the
proposed equal payments;
(ii) the agreement includes a provision making the initial equal payment schedule
subject to an annual adjustment, as necessary, to account for differences between the property's
fair market value as of the annual lien date and the property's fair market value that formed the
basis of the initial equal payment schedule;
(iii) the commission, the taxpayer, and each affected taxing entity approve the
agreement; and
(iv) the total amount the taxpayer pays under the agreement is no less than the amount
the taxpayer would have paid in the absence of the agreement.
(b) A taxing entity may not approve an agreement under this section on behalf of
another taxing entity.
(2) (a) Subject to Subsection (2)(b), a tax lien under this chapter against the taxpayer's
property is not affected by a payment pursuant to an agreement under this section to the extent
of the difference between the amount the taxpayer would have been required to pay in the
absence of the agreement and the amount of the payment under the agreement.
(b) For purposes of enforcing a tax lien under this chapter, a taxpayer's failure to pay
the full amount of taxes that the taxpayer would have been required to pay in the absence of an
agreement under this section does not constitute a failure to pay the full amount of taxes owing:
(i) if the taxpayer pays the full amount of the payment owing under the agreement; and
(ii) unless the taxpayer:
(A) files for bankruptcy;
(B) transfers ownership of the property that is the subject of the property taxes; or
(C) has a change in ownership and the new owner does not assume all responsibility
and liability under the agreement.
(3) (a) The commission may revise, accelerate, or cancel an equal payment agreement
under this section to the same extent and for the same reasons that the commission may revise,
accelerate, or cancel an installment agreement under Section 
59-1-1004
.
(b) The commission shall give the taxpayer reasonable notice of its intent to revise or
cancel an equal payment agreement under this section.
(4) The commission shall promulgate rules to ensure that tax revenue derived from
payments pursuant to an agreement under this section do not affect the calculation of the
certified tax rate under Section 
59-2-924
.
(5) [
(a) The
] 
If the commission or a taxing entity enters into an equal payment
agreement under this section:
(a) the
 commission shall annually provide 
an electronic report
 to the Revenue and
Taxation Interim Committee [
an assessment of
] 
on
 the effects of equal payment agreements
under this section[
.
]
; and
(b) the Revenue and Taxation Interim Committee shall annually review and assess the
effects of equal payment agreements under this section.
Section 6. Section 
59-5-102
 is amended to read:
59-5-102.
Severance tax -- Rate -- Computation -- Annual exemption -- Tax credit 
-- Tax rate reduction.
(1) (a) Subject to Subsection (1)(b), a person owning an interest in oil or gas produced
from a well in the state, including a working interest, royalty interest, payment out of
production, or any other interest, or in the proceeds of the production of oil or gas, shall pay to
the state a severance tax on the basis of the value determined under Section 
59-5-103.1
 of the
oil or gas:
(i) produced; and
(ii) (A) saved;
(B) sold; or
(C) transported from the field where the substance was produced.
(b) This section applies to an interest in oil or gas produced from a well in the state or
in the proceeds of the production of oil or gas produced from a well in the state except for:
(i) an interest of the United States in oil or gas or in the proceeds of the production of
oil or gas;
(ii) an interest of the state or a political subdivision of the state in oil or gas or in the
proceeds of the production of oil or gas; or
(iii) an interest of an Indian or Indian tribe as defined in Section 
9-9-101
 in oil or gas or
in the proceeds of the production of oil or gas produced from land under the jurisdiction of the
United States.
(2) (a) [
Subject to Subsection (2)(d), the
] 
The
 severance tax rate for oil is as follows:
(i) 3% of the value of the oil up to and including the first $13 per barrel for oil; and
(ii) 5% of the value of the oil from $13.01 and above per barrel for oil.
(b) [
Subject to Subsection (2)(d), the
] 
The
 severance tax rate for natural gas is as
follows:
(i) 3% of the value of the natural gas up to and including the first $1.50 per MCF for
gas; and
(ii) 5% of the value of the natural gas from $1.51 and above per MCF for gas.
(c) [
Subject to Subsection (2)(d), the
] 
The
 severance tax rate for natural gas liquids is
4% of the value of the natural gas liquids.
[
(d) (i) On or before December 15, 2004, the Office of the Legislative Fiscal Analyst
and the Governor's Office of Management and Budget shall prepare a revenue forecast
estimating the amount of revenues that:
]
[
(A) would be generated by the taxes imposed by this part for the calendar year
beginning on January 1, 2004 had 2004 General Session S.B. 191 not taken effect; and
]
[
(B) will be generated by the taxes imposed by this part for the calendar year beginning
on January 1, 2004.
]
[
(ii) Effective on January 1, 2005, the tax rates described in Subsections (2)(a) through
(c) shall be:
]
[
(A) increased as provided in Subsection (2)(d)(iii) if the amount of revenues estimated
under Subsection (2)(d)(i)(B) is less than the amount of revenues estimated under Subsection
(2)(d)(i)(A); or
]
[
(B) decreased as provided in Subsection (2)(d)(iii) if the amount of revenues
estimated under Subsection (2)(d)(i)(B) is greater than the amount of revenues estimated under
Subsection (2)(d)(i)(A).
]
[
(iii) For purposes of Subsection (2)(d)(ii):
]
[
(A) subject to Subsection (2)(d)(iv)(B):
]
[
(I) if an increase is required under Subsection (2)(d)(ii)(A), the total increase in the tax
rates shall be by the amount necessary to generate for the calendar year beginning on January 1,
revenues equal to the amount by which the revenues estimated under Subsection
(2)(d)(i)(A) exceed the revenues estimated under Subsection (2)(d)(i)(B); or
]
[
(II) if a decrease is required under Subsection (2)(d)(ii)(B), the total decrease in the
tax rates shall be by the amount necessary to reduce for the calendar year beginning on January
1, 2005 revenues equal to the amount by which the revenues estimated under Subsection
(2)(d)(i)(B) exceed the revenues estimated under Subsection (2)(d)(i)(A); and
]
[
(B) an increase or decrease in each tax rate under Subsection (2)(d)(ii) shall be in
proportion to the amount of revenues generated by each tax rate under this part for the calendar
year beginning on January 1, 2003.
]
[
(iv) (A) The commission shall calculate any tax rate increase or decrease required by
Subsection (2)(d)(ii) using the best information available to the commission.
]
[
(B) If the tax rates described in Subsections (2)(a) through (c) are increased or
decreased as provided in this Subsection (2)(d), the commission shall mail a notice to each
person required to file a return under this part stating the tax rate in effect on January 1, 2005
as a result of the increase or decrease.
]
(3) If oil or gas is shipped outside the state:
(a) the shipment constitutes a sale; and
(b) the oil or gas is subject to the tax imposed by this section.
(4) (a) Except as provided in Subsection (4)(b), if the oil or gas is stockpiled, the tax is
not imposed until the oil or gas is:
(i) sold;
(ii) transported; or
(iii) delivered.
(b) Notwithstanding Subsection (4)(a), if oil or gas is stockpiled for more than two
years, the oil or gas is subject to the tax imposed by this section.
(5) A tax is not imposed under this section upon:
(a) stripper wells, unless the exemption prevents the severance tax from being treated
as a deduction for federal tax purposes;
(b) the first 12 months of production for wildcat wells started after January 1, 1990; or
(c) the first six months of production for development wells started after January 1,
1990.
(6) (a) Subject to Subsections (6)(b) and (c), a working interest owner who pays for all
or part of the expenses of a recompletion or workover may claim a nonrefundable tax credit
equal to 20% of the amount paid.
(b) The tax credit under Subsection (6)(a) for each recompletion or workover may not
exceed $30,000 per well during each calendar year.
(c) If any amount of tax credit a taxpayer is allowed under this Subsection (6) exceeds
the taxpayer's tax liability under this part for the calendar year for which the taxpayer claims
the tax credit, the amount of tax credit exceeding the taxpayer's tax liability for the calendar
year may be carried forward for the next three calendar years.
(7) A 50% reduction in the tax rate is imposed upon the incremental production
achieved from an enhanced recovery project.
(8) The taxes imposed by this section are:
(a) in addition to all other taxes provided by law; and
(b) delinquent, unless otherwise deferred, on June 1 next succeeding the calendar year
when the oil or gas is:
(i) produced; and
(ii) (A) saved;
(B) sold; or
(C) transported from the field.
(9) With respect to the tax imposed by this section on each owner of oil or gas or in the
proceeds of the production of those substances produced in the state, each owner is liable for
the tax in proportion to the owner's interest in the production or in the proceeds of the
production.
(10) The tax imposed by this section shall be reported and paid by each producer that
takes oil or gas in kind pursuant to agreement on behalf of the producer and on behalf of each
owner entitled to participate in the oil or gas sold by the producer or transported by the
producer from the field where the oil or gas is produced.
(11) Each producer shall deduct the tax imposed by this section from the amounts due
to other owners for the production or the proceeds of the production.
[
(12) (a) The Revenue and Taxation Interim Committee shall review the applicability
of the tax provided for in this chapter to coal-to-liquids, oil shale, and tar sands technology on
or before the October 2011 interim meeting.
]
[
(b) The Revenue and Taxation Interim Committee shall address in its review the cost
and benefit of not applying the tax provided for in this chapter to coal-to-liquids, oil shale, and
tar sands technology.
]
[
(c) The Revenue and Taxation Interim Committee shall report its findings and
recommendations under this Subsection (12) to the Legislative Management Committee on or
before the November 2011 interim meeting.
]
Section 7. Section 
59-7-607
 is amended to read:
59-7-607.
Utah low-income housing tax credit.
(1) As used in this section:
(a) "Allocation certificate" means:
(i) the certificate prescribed by the commission and issued by the Utah Housing
Corporation to each taxpayer that specifies the percentage of the annual federal low-income
housing tax credit that each taxpayer may take as an annual credit against state income tax; or
(ii) a copy of the allocation certificate that the housing sponsor provides to the
taxpayer.
(b) "Building" means a qualified low-income building as defined in Section 42(c),
Internal Revenue Code.
(c) "Federal low-income housing tax credit" means the tax credit under Section 42,
Internal Revenue Code.
(d) "Housing sponsor" means a corporation in the case of a C corporation, a partnership
in the case of a partnership, a corporation in the case of an S corporation, or a limited liability
company in the case of a limited liability company.
(e) "Qualified allocation plan" means the qualified allocation plan adopted by the Utah
Housing Corporation pursuant to Section 42(m), Internal Revenue Code.
(f) "Special low-income housing tax credit certificate" means a certificate:
(i) prescribed by the commission;
(ii) that a housing sponsor issues to a taxpayer for a taxable year; and
(iii) that specifies the amount of tax credit a taxpayer may claim under this section if
the taxpayer meets the requirements of this section.
(g) "Taxpayer" means a person that is allowed a tax credit in accordance with this
section which is the corporation in the case of a C corporation, the partners in the case of a
partnership, the shareholders in the case of an S corporation, and the members in the case of a
limited liability company.
(2) (a) For taxable years beginning on or after January 1, 1995, there is allowed a
nonrefundable tax credit against taxes otherwise due under this chapter or Chapter 8, Gross
Receipts Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax
Act, for taxpayers issued an allocation certificate.
(b) The tax credit shall be in an amount equal to the greater of the amount of:
(i) federal low-income housing tax credit to which the taxpayer is allowed during that
year multiplied by the percentage specified in an allocation certificate issued by the Utah
Housing Corporation; or
(ii) tax credit specified in the special low-income housing tax credit certificate that the
housing sponsor issues to the taxpayer as provided in Subsection (2)(c).
(c) For purposes of Subsection (2)(b)(ii), the tax credit is equal to the product of:
(i) the total amount of low-income housing tax credit under this section that:
(A) a housing sponsor is allowed for a building; and
(B) all of the taxpayers may claim with respect to the building if the taxpayers meet the
requirements of this section; and
(ii) the percentage of tax credit a taxpayer may claim:
(A) under this section if the taxpayer meets the requirements of this section; and
(B) as provided in the agreement between the taxpayer and the housing sponsor.
(d) (i) For the calendar year beginning on January 1, 1995, through the calendar year
beginning on January 1, 2015, the aggregate annual tax credit that the Utah Housing
Corporation may allocate for the credit period described in Section 42(f), Internal Revenue
Code, pursuant to this section and Section 
59-10-1010
 is an amount equal to the product of:
(A) 12.5 cents; and
(B) the population of Utah.
(ii) For purposes of this section, the population of Utah shall be determined in
accordance with Section 146(j), Internal Revenue Code.
(3) (a) By October 1, 1994, the Utah Housing Corporation shall determine criteria and
procedures for allocating the tax credit under this section and Section 
59-10-1010
 and
incorporate the criteria and procedures into the Utah Housing Corporation's qualified allocation
plan.
(b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a)
based on:
(i) the number of affordable housing units to be created in Utah for low and moderate
income persons in the residential housing development of which the building is a part;
(ii) the level of area median income being served by the development;
(iii) the need for the tax credit for the economic feasibility of the development; and
(iv) the extended period for which the development commits to remain as affordable
housing.
(4) (a) The following may apply to the Utah Housing Corporation for a tax credit under
this section:
(i) any housing sponsor that has received an allocation of the federal low-income
housing tax credit; or
(ii) any applicant for an allocation of the federal low-income housing tax credit.
(b) The Utah Housing Corporation may not require fees for applications of the tax
credit under this section in addition to those fees required for applications for the federal
low-income housing tax credit.
(5) (a) The Utah Housing Corporation shall determine the amount of the tax credit to
allocate to a qualifying housing sponsor in accordance with the qualified allocation plan of the
Utah Housing Corporation.
(b) (i) The Utah Housing Corporation shall allocate the tax credit to housing sponsors
by issuing an allocation certificate to qualifying housing sponsors.
(ii) The allocation certificate under Subsection (5)(b)(i) shall specify the allowed
percentage of the federal low-income housing tax credit as determined by the Utah Housing
Corporation.
(c) The percentage specified in an allocation certificate may not exceed 100% of the
federal low-income housing tax credit.
(6) A housing sponsor shall provide a copy of the allocation certificate to each taxpayer
that is issued a special low-income housing tax credit certificate.
(7) (a) A housing sponsor shall provide to the commission a list of:
(i) the taxpayers issued a special low-income housing tax credit certificate; and
(ii) for each taxpayer described in Subsection (7)(a)(i), the amount of tax credit listed
on the special low-income housing tax credit certificate.
(b) A housing sponsor shall provide the list required by Subsection (7)(a):
(i) to the commission;
(ii) on a form provided by the commission; and
(iii) with the housing sponsor's tax return for each taxable year for which the housing
sponsor issues a special low-income housing tax credit certificate described in this Subsection
(7).
(8) (a) All elections made by the taxpayer pursuant to Section 42, Internal Revenue
Code, shall apply to this section.
(b) (i) If a taxpayer is required to recapture a portion of any federal low-income
housing tax credit, the taxpayer shall also be required to recapture a portion of any state tax
credits authorized by this section.
(ii) The state recapture amount shall be equal to the percentage of the state tax credit
that equals the proportion the federal recapture amount bears to the original federal low-income
housing tax credit amount subject to recapture.
(9) (a) Any tax credits returned to the Utah Housing Corporation in any year may be
reallocated within the same time period as provided in Section 42, Internal Revenue Code.
(b) Tax credits that are unallocated by the Utah Housing Corporation in any year may
be carried over for allocation in the subsequent year.
(10) (a) Amounts otherwise qualifying for the tax credit, but not allowable because the
tax credit exceeds the tax, may be carried back three years or may be carried forward five years
as a credit against the tax.
(b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:
(i) before the application of the tax credits earned in the current year; and
(ii) on a first-earned first-used basis.
(11) Any tax credit taken in this section may be subject to an annual audit by the
commission.
(12) The Utah Housing Corporation shall 
annually
 provide an [
annual
] 
electronic
report to the Revenue and Taxation Interim Committee which shall include at least:
(a) the purpose and effectiveness of the tax credits; and
(b) the benefits of the tax credits to the state.
(13) The commission may, in consultation with the Utah Housing Corporation,
promulgate rules to implement this section.
Section 8. Section 
59-7-612
 is amended to read:
59-7-612.
Tax credits for research activities conducted in the state -- Carry
forward -- Commission to report modification or repeal of certain federal provisions --
Revenue and Taxation Interim Committee study.
(1) (a) A taxpayer meeting the requirements of this section may claim the following
nonrefundable tax credits:
(i) a research tax credit of 5% of the taxpayer's qualified research expenses for the
current taxable year that exceed the base amount provided for under Subsection (4);
(ii) a tax credit for a payment to a qualified organization for basic research as provided
in Section 41(e), Internal Revenue Code, of 5% for the current taxable year that exceed the
base amount provided for under Subsection (4); and
(iii) a tax credit equal to 7.5% of the taxpayer's qualified research expenses for the
current taxable year.
(b) Subject to Subsection (5), a taxpayer may claim a tax credit under:
(i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the taxpayer incurs
the qualified research expenses; or
(ii) Subsection (1)(a)(ii), for the taxable year for which the taxpayer makes the payment
to the qualified organization.
(c) The tax credits provided for in this section do not include the alternative
incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
(2) For purposes of claiming a tax credit under this section, a unitary group as defined
in Section 
59-7-101
 is considered to be one taxpayer.
(3) Except as specifically provided for in this section:
(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
Section 41, Internal Revenue Code; and
(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
the tax credits authorized under Subsection (1).
(4) For purposes of this section:
(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
Internal Revenue Code, except that:
(i) the base amount does not include the calculation of the alternative incremental
credit provided for in Section 41(c)(4), Internal Revenue Code;
(ii) a taxpayer's gross receipts include only those gross receipts attributable to sources
within this state as provided in Part 3, Allocation and Apportionment of Income - Utah
UDITPA Provisions; and
(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
the base amount, a taxpayer:
(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
regardless of whether the taxpayer meets the requirements of Section 41(c)(3)(B)(i)(I) or (II);
and
(B) may not revoke an election to be treated as a start-up company under Subsection
(4)(a)(iii)(A);
(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
that the term includes only basic research conducted in this state;
(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
that the term includes only qualified research conducted in this state;
(d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
Revenue Code, except that the term includes only:
(i) in-house research expenses incurred in this state; and
(ii) contract research expenses incurred in this state; and
(e) a tax credit provided for in this section is not terminated if a credit terminates under
Section 41, Internal Revenue Code.
(5) (a) If the amount of a tax credit claimed by a taxpayer under Subsection (1)(a)(i) or
(ii) exceeds the taxpayer's tax liability under this chapter for a taxable year, the amount of the
tax credit exceeding the tax liability:
(i) may be carried forward for a period that does not exceed the next 14 taxable years;
and
(ii) may not be carried back to a taxable year preceding the current taxable year.
(b) A taxpayer may not carry forward the tax credit allowed by Subsection (1)(a)(iii).
(6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules for purposes of this section prescribing a certification process for
qualified organizations to ensure that amounts paid to the qualified organizations are for basic
research conducted in this state.
(7) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
commission shall 
provide an electronic
 report 
of
 the modification or repeal to the Revenue and
Taxation Interim Committee within 60 days after the day on which the modification or repeal
becomes effective.
(8) (a) The Revenue and Taxation Interim Committee shall review the tax credits
provided for in this section on or before October 1 of the year after the year in which the
commission reports under Subsection (7) a modification or repeal of a provision of Section 41,
Internal Revenue Code.
(b) Notwithstanding Subsection (8)(a), the Revenue and Taxation Interim Committee is
not required to review the tax credits provided for in this section if the only modification to a
provision of Section 41, Internal Revenue Code, is the extension of the termination date
provided for in Section 41(h), Internal Revenue Code.
(c) The Revenue and Taxation Interim Committee shall address in a review under this
section:
(i) the cost of the tax credits provided for in this section;
(ii) the purpose and effectiveness of the tax credits provided for in this section;
(iii) whether the tax credits provided for in this section benefit the state; and
(iv) whether the tax credits provided for in this section should be:
(A) continued;
(B) modified; or
(C) repealed.
(d) If the Revenue and Taxation Interim Committee reviews the tax credits provided
for in this section, the committee shall report its findings to the Legislative Management
Committee on or before the November interim meeting of the year in which the Revenue and
Taxation Interim Committee reviews the tax credits.
Section 9. Section 
59-7-613
 is amended to read:
59-7-613.
Tax credits for machinery, equipment, or both primarily used for
conducting qualified research or basic research -- Carry forward -- Commission to report
modification or repeal of certain federal provisions -- Revenue and Taxation Interim
Committee study.
(1) As used in this section:
(a) "Basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
that the term includes only basic research conducted in this state.
(b) "Equipment" includes:
(i) a computer;
(ii) computer equipment; and
(iii) computer software.
(c) "Purchase price":
(i) includes the cost of installing an item of machinery or equipment; and
(ii) does not include a tax imposed under Chapter 12, Sales and Use Tax Act, on an
item of machinery or equipment.
(d) "Qualified organization" is as defined in Section 41(e)(6), Internal Revenue Code.
(e) "Qualified research" is as defined in Section 41(d), Internal Revenue Code, except
that the term includes only qualified research conducted in this state.
(2) (a) Except as provided in Subsection (2)(c), for taxable years beginning on or after
January 1, 1999, but beginning before December 31, 2010, a taxpayer meeting the requirements
of this section may claim the following nonrefundable tax credits:
(i) a tax credit of 6% of the purchase price of machinery, equipment, or both:
(A) purchased by the taxpayer during the taxable year;
(B) that is subject to a tax under Chapter 12, Sales and Use Tax Act; and
(C) that is primarily used to conduct qualified research in this state; and
(ii) a tax credit of 6% of the purchase price of machinery, equipment, or both:
(A) purchased by the taxpayer during the taxable year;
(B) that is subject to a tax under Chapter 12, Sales and Use Tax Act;
(C) that is donated to a qualified organization; and
(D) that is primarily used to conduct basic research in this state.
(b) Subject to Subsection (5), a taxpayer may claim a tax credit under this section for
the taxable year for which the taxpayer purchases the machinery, equipment, or both.
(c) If a taxpayer qualifies for a tax credit under Subsection (2)(a) for a purchase of
machinery, equipment, or both, the taxpayer may not claim the tax credit or carry the tax credit
forward if the machinery, equipment, or both, is primarily used to conduct qualified research in
the state for a time period that is less than 12 consecutive months.
(3) For purposes of claiming a tax credit under this section, a unitary group as defined
in Section 
59-7-101
 is considered to be one taxpayer.
(4) Notwithstanding Section 41(h), Internal Revenue Code, a tax credit provided for in
this section is not terminated if a credit terminates under Section 41, Internal Revenue Code.
(5) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
taxpayer's tax liability under this chapter for a taxable year, the amount of the tax credit
exceeding the tax liability:
(a) may be carried forward for a period that does not exceed the next 14 taxable years;
and
(b) may not be carried back to a taxable year preceding the current taxable year.
(6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules for purposes of this section prescribing a certification process for
qualified organizations to ensure that machinery, equipment, or both provided to the qualified
organization is to be primarily used to conduct basic research in this state.
(7) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
commission shall 
provide an electronic
 report 
of
 the modification or repeal to the Revenue and
Taxation Interim Committee within 60 days after the day on which the modification or repeal
becomes effective.
(8) (a) The Revenue and Taxation Interim Committee shall review the tax credits
provided for in this section on or before October 1 of the year after the year in which the
commission reports under Subsection (7) a modification or repeal of a provision of Section 41,
Internal Revenue Code.
(b) Notwithstanding Subsection (8)(a), the Revenue and Taxation Interim Committee is
not required to review the tax credits provided for in this section if the only modification to a
provision of Section 41, Internal Revenue Code, is the extension of the termination date
provided for in Section 41(h), Internal Revenue Code.
(c) The Revenue and Taxation Interim Committee shall address in a review under this
section the:
(i) cost of the tax credits provided for in this section;
(ii) purpose and effectiveness of the tax credits provided for in this section;
(iii) whether the tax credits provided for in this section benefit the state; and
(iv) whether the tax credits provided for in this section should be:
(A) continued;
(B) modified; or
(C) repealed.
(d) If the Revenue and Taxation Interim Committee reviews the tax credits provided
for in this section, the committee shall report its findings to the Legislative Management
Committee on or before the November interim meeting of the year in which the Revenue and
Taxation Interim Committee reviews the tax credits.
Section 10. Section 
59-7-614.2
 is amended to read:
59-7-614.2.
Refundable economic development tax credit.
(1) As used in this section:
(a) "Business entity" means a taxpayer that meets the definition of "business entity" as
defined in Section 
63N-2-103
.
(b) "Community development and renewal agency" [
is as
] 
means the same as that term
is
 defined in Section 
17C-1-102
.
(c) "Local government entity" [
is as
] 
means the same as that term is
 defined in Section
63N-2-103
.
(d) "New incremental jobs" means the same as that term is defined in Section
63N-2-103
.
(e) "New state revenues" means the same as that term is defined in Section 
63N-2-103
.
[
(d)
] 
(f)
 "Office" means the Governor's Office of Economic Development.
(2) Subject to the other provisions of this section, a business entity, local government
entity, or community development and renewal agency may claim a refundable tax credit for
economic development.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to the business entity, local government entity, or
community development and renewal agency for the taxable year.
(4) A community development and renewal agency may claim a tax credit under this
section only if a local government entity assigns the tax credit to the community development
and renewal agency in accordance with Section 
63N-2-104
.
(5) (a) In accordance with any rules prescribed by the commission under Subsection
(5)(b), the commission shall make a refund to the following that claim a tax credit under this
section:
(i) a local government entity;
(ii) a community development and renewal agency; or
(iii) a business entity if the amount of the tax credit exceeds the business entity's tax
liability for a taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a business entity,
local government entity, or community development and renewal agency as required by
Subsection (5)(a).
(6) (a) On or before October 1, 2013, and every five years after October 1, 2013, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
(b) For purposes of the study required by this Subsection (6), the office shall provide
the following information to the Revenue and Taxation Interim Committee 
by electronic
means
:
(i) the amount of tax credit that the office grants to each business entity, local
government entity, or community development and renewal agency for each calendar year;
(ii) the criteria that the office uses in granting a tax credit;
(iii) (A) for a business entity, the new state revenues generated by the business entity
for the calendar year; or
(B) for a local government entity, regardless of whether the local government entity
assigns the tax credit in accordance with Section 
63N-2-104
, the new state revenues generated
as a result of a new commercial project within the local government entity for each calendar
year;
(iv) estimates for each of the next five calendar years of the following:
(A) the amount of tax credits that the office will grant;
(B) the amount of new state revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
[
(iv)
] 
(v)
 the information contained in the office's latest report to the Legislature under
Section 
63N-2-106
; and
[
(v)
] 
(vi)
 any other information that the Revenue and Taxation Interim Committee
requests.
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (6)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 11. Section 
59-7-614.5
 is amended to read:
59-7-614.5.
Refundable motion picture tax credit.
(1) As used in this section:
(a) "Motion picture company" means a taxpayer that meets the definition of a motion
picture company under Section 
63N-8-102
.
(b) "Office" means the Governor's Office of Economic Development.
(c) "State-approved production" has the same meaning as defined in Section
63N-8-102
.
(2) For taxable years beginning on or after January 1, 2009, a motion picture company
may claim a refundable tax credit for a state-approved production.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to a motion picture company under Section
63N-8-103
 for the taxable year.
(4) (a) In accordance with any rules prescribed by the commission under Subsection
(4)(b), the commission shall make a refund to a motion picture company that claims a tax
credit under this section if the amount of the tax credit exceeds the motion picture company's
tax liability for a taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a motion picture
company as required by Subsection (4)(a).
(5) (a) On or before October 1, 2014, and every five years after October 1, 2014, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
(b) For purposes of the study required by this Subsection (5), the office shall provide
the following information to the Revenue and Taxation Interim Committee 
by electronic
means
:
(i) 
(A)
 the amount of tax credit that the office grants to each motion picture company
for each calendar year; 
and
(B) estimates of the amount of tax credit that the office will grant for each of the next
five calendar years;
(ii) the criteria that the office uses in granting the tax credit;
(iii) the dollars left in the state, as defined in Section 
63N-8-102
, by each motion
picture company for each calendar year;
(iv) the information contained in the office's latest report to the Legislature under
Section 
63N-8-105
; and
(v) any other information requested by the Revenue and Taxation Interim Committee.
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 12. Section 
59-7-614.7
 is amended to read:
59-7-614.7.
Nonrefundable alternative energy development tax credit.
(1) As used in this section:
(a) "Alternative energy entity" is as defined in Section 
63M-4-502
.
(b) "Alternative energy project" is as defined in Section 
63M-4-502
.
(c) "Office" is as defined in Section 
63M-4-401
.
(2) Subject to the other provisions of this section, an alternative energy entity may
claim a nonrefundable tax credit for alternative energy development as provided in this section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
(4) An alternative energy entity may carry forward a tax credit under this section for a
period that does not exceed the next seven taxable years if:
(a) the alternative energy entity is allowed to claim a tax credit under this section for a
taxable year; and
(b) the amount of the tax credit exceeds the alternative energy entity's tax liability
under this chapter for that taxable year.
(5) (a) On or before October 1, 2017, and every five years after October 1, 2017, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
(b) For purposes of the study required by this Subsection (5), the office shall provide
the following information to the Revenue and Taxation Interim Committee 
by electronic
means
:
(i) the amount of tax credit that the office grants to each alternative energy entity for
each taxable year;
(ii) the new state revenues generated by each alternative energy project;
(iii) the information contained in the office's latest report to the Legislature under
Section 
63M-4-505
; and
(iv) any other information that the Revenue and Taxation Interim Committee requests.
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 13. Section 
59-7-614.8
 is amended to read:
59-7-614.8.
Nonrefundable alternative energy manufacturing tax credit.
(1) As used in this section:
(a) "Alternative energy entity" [
is as
] 
means the same as that term is
 defined in Section
63N-2-702
.
(b) "Alternative energy manufacturing project" [
is as
] 
means the same as that term is
defined in Section 
63N-2-702
.
(c) "New incremental job within the state" means the same as that term is defined in
Section 
63N-2-702
.
(d) "New state revenues" means the same as that term is defined in Section 
63N-2-702
.
[
(c)
] 
(e)
 "Office" means the Governor's Office of Economic Development.
(2) Subject to the other provisions of this section, an alternative energy entity may
claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63N, Chapter 2, Part 7, Alternative
Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
(4) An alternative energy entity may carry forward a tax credit under this section for a
period that does not exceed the next seven taxable years if:
(a) the alternative energy entity is allowed to claim a tax credit under this section for a
taxable year; and
(b) the amount of the tax credit exceeds the alternative energy entity's tax liability
under this chapter for that taxable year.
(5) (a) On or before October 1, 2017, and every five years after October 1, 2017, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
(b) For purposes of the study required by this Subsection (5), the office shall provide
the following information to the Revenue and Taxation Interim Committee 
by electronic
means
:
(i) the amount of tax credit that the office grants to each alternative energy entity for
each taxable year;
(ii) the new state revenues generated by each alternative energy manufacturing project;
(iii) estimates for each of the next five calendar years of the following:
(A) the amount of tax credits that the office will grant;
(B) the amount of new state revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
[
(iii)
] 
(iv)
 the information contained in the office's latest report to the Legislature under
Section 
63N-2-705
; and
[
(iv)
] 
(v)
 any other information that the Revenue and Taxation Interim Committee
requests.
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 14. Section 
59-7-701
 is amended to read:
59-7-701.
Taxation of S corporations.
(1) Except as provided in Section 
59-7-102
 and subject to the other provisions of this
part, beginning on July 1, 1994, and ending on the last day of the taxable year that begins on or
after January 1, 2012, but begins on or before December 31, 2012, an S corporation is subject
to taxation in the same manner as that S corporation is taxed under Subchapter S - Tax
Treatment of S Corporations and Their Shareholders, Sec. 1361 et seq., Internal Revenue Code.
(2) An S corporation is taxed at the tax rate provided in Section 
59-7-104
.
(3) The business income and nonbusiness income of an S corporation is subject to Part
3, Allocation and Apportionment of Income - Utah UDITPA Provisions.
(4) An S corporation having income derived from or connected with Utah sources shall
make a return in accordance with Section 
59-10-507
.
(5) An S corporation shall make payments of estimated tax as required by Section
59-7-504
.
(6) An S corporation is subject to Chapter 10, Part 14, Pass-Through Entities and
Pass-Through Entity Taxpayers Act.
(7) A pass-through entity taxpayer as defined in Section 
59-10-1402
 of an S
corporation is subject to Chapter 10, Part 14, Pass-Through Entities and Pass-Through Entity
Taxpayers Act.
(8) Provisions under this chapter governing the following apply to an S corporation:
(a) an assessment;
(b) a penalty;
(c) a refund; or
(d) a record required for an S corporation.
[
(9) (a) During the 2011 interim, the Revenue and Taxation Interim Committee shall
study the fiscal impacts of:
]
[
(i) the enactment of Laws of Utah 2009, Chapter 312; and
]
[
(ii) the taxation of S corporations under this part.
]
[
(b) On or before November 30, 2011, the Revenue and Taxation Interim Committee
shall report its findings and recommendations on the study to the Executive Appropriations
Committee.
]
Section 15. Section 
59-7-903
 is amended to read:
59-7-903.
Removal of tax credit from tax return -- Prohibition on claiming or
carrying forward a tax credit -- Commission publishing requirements.
(1) Subject to Subsection (2), the commission shall remove a tax credit from a tax
return and a person filing a tax return may not claim or carry forward the tax credit if:
(a) the total amount of tax credit claimed or carried forward by all persons who file a
tax return is less than $10,000 per taxable year for three consecutive taxable years; and
(b) less than 10 persons per year for the three consecutive taxable years described in
Subsection (1)(a) file a tax return claiming or carrying forward the tax credit.
(2) If the commission determines the requirements of Subsection (1) are met, the
commission shall remove a tax credit from a tax return and a person filing a tax return may not
claim or carry forward the tax credit beginning two taxable years after the January 1
immediately following the date the commission determines the requirements of Subsection (1)
are met.
(3) The commission shall, on or before the November interim meeting of the year after
the taxable year in which the commission determines the requirements of Subsection (1) are
met, report to the Revenue and Taxation Interim Committee 
by electronic means
 that, in
accordance with this section:
(a) the commission is required to remove a tax credit from a return on which the tax
credit appears; and
(b) a person filing a tax return may not claim or carry forward the tax credit.
(4) (a) Within a 30-day period after making the report required by Subsection (3), the
commission shall publish a list in accordance with Subsection (4)(b) stating each tax credit that
the commission will remove from a return on which the tax credit appears.
(b) The list shall:
(i) be published on:
(A) the commission's website; and
(B) the public legal notice website in accordance with Section 
45-1-101
;
(ii) include a statement that:
(A) the commission is required to remove the tax credit from each return on which the
tax credit appears; and
(B) the tax credit may not be claimed or carried forward on a return;
(iii) state the taxable year for which the removal described in Subsection (4)(a) takes
effect; and
(iv) remain available for viewing and searching until the commission publishes a new
list in accordance with this Subsection (4).
Section 16. Section 
59-9-101
 is amended to read:
59-9-101.
Tax basis -- Rates -- Exemptions -- Rate reductions.
(1) (a) Except as provided in Subsection (1)(b), (1)(d), or (5), an admitted insurer shall
pay to the commission on or before March 31 in each year, a tax of 2-1/4% of the total
premiums received by it during the preceding calendar year from insurance covering property
or risks located in this state.
(b) This Subsection (1) does not apply to:
(i) workers' compensation insurance, assessed under Subsection (2);
(ii) title insurance premiums taxed under Subsection (3);
(iii) annuity considerations;
(iv) insurance premiums paid by an institution within the state system of higher
education as specified in Section 
53B-1-102
; and
(v) ocean marine insurance.
(c) The taxable premium under this Subsection (1) shall be reduced by:
(i) the premiums returned or credited to policyholders on direct business subject to tax
in this state;
(ii) the premiums received for reinsurance of property or risks located in this state; and
(iii) the dividends, including premium reduction benefits maturing within the year:
(A) paid or credited to policyholders in this state; or
(B) applied in abatement or reduction of premiums due during the preceding calendar
year.
(d) (i) For purposes of this Subsection (1)(d):
(A) "Utah variable life insurance premium" means an insurance premium paid:
(I) by:
(Aa) a corporation; or
(Bb) a trust established or funded by a corporation; and
(II) for variable life insurance covering risks located within the state.
(B) "Variable life insurance" means an insurance policy that provides for life
insurance, the amount or duration of which varies according to the investment experience of
one or more separate accounts that are established and maintained by the insurer pursuant to
Title 31A, Insurance Code.
(ii) Notwithstanding Subsection (1)(a), beginning on January 1, 2006, the tax on that
portion of the total premiums subject to a tax under Subsection (1)(a) that is a Utah variable
life insurance premium shall be calculated as follows:
(A) 2-1/4% of the first $100,000 of Utah variable life insurance premiums:
(I) paid for each variable life insurance policy; and
(II) received by the admitted insurer in the preceding calendar year; and
(B) 0.08% of the Utah variable life insurance premiums that exceed $100,000:
(I) paid for the policy described in Subsection (1)(d)(ii)(A); and
(II) received by the admitted insurer in the preceding calendar year.
[
(iii) (A) On or before October 1, 2009, and every three years after October 1, 2009, the
Revenue and Taxation Interim Committee shall study the rate reduction contained in this
Subsection (1)(d).
]
[
(B) As part of the study required by Subsection (1)(d)(iii)(A) the Revenue and
Taxation Interim Committee shall:
]
[
(I) hear testimony from the commission and industry representatives;
]
[
(II) make recommendations concerning whether the rate reduction should be
continued, modified, or repealed; and
]
[
(III) make findings regarding:
]
[
(Aa) the cost of the rate reduction;
]
[
(Bb) the purpose and effectiveness of the rate reduction; and
]
[
(Cc) any benefits of the rate reduction to the state.
]
(2) (a) An admitted insurer writing workers' compensation insurance in this state,
including the Workers' Compensation Fund created under Title 31A, Chapter 33, Workers'
Compensation Fund, shall pay to the tax commission, on or before March 31 in each year, a
premium assessment on the basis of the total workers' compensation premium income received
by the insurer from workers' compensation insurance in this state during the preceding calendar
year as follows:
(i) on or before December 31, 2010, an amount of equal to or greater than 1%, but
equal to or less than 5.75% of the total workers' compensation premium income described in
this Subsection (2);
(ii) on and after January 1, 2011, but on or before December 31, 2017, an amount of
equal to or greater than 1%, but equal to or less than 4.25% of the total workers' compensation
premium income described in this Subsection (2); and
(iii) on and after January 1, 2018, an amount equal to 1.25% of the total workers'
compensation premium income described in this Subsection (2).
(b) Total workers' compensation premium income means the net written premium as
calculated before any premium reduction for any insured employer's deductible, retention, or
reimbursement amounts and also those amounts equivalent to premiums as provided in Section
34A-2-202
.
(c) The percentage of premium assessment applicable for a calendar year shall be
determined by the Labor Commission under Subsection (2)(d). The total premium income
shall be reduced in the same manner as provided in Subsections (1)(c)(i) and (1)(c)(ii), but not
as provided in Subsection (1)(c)(iii). The commission shall promptly remit from the premium
assessment collected under this Subsection (2):
(i) income to the state treasurer for credit to the Employers' Reinsurance Fund created
under Subsection 
34A-2-702
(1) as follows:
(A) on or before December 31, 2009, an amount of up to 5% of the total workers'
compensation premium income;
(B) on and after January 1, 2010, but on or before December 31, 2010, an amount of up
to 4.5% of the total workers' compensation premium income;
(C) on and after January 1, 2011, but on or before December 31, 2017, an amount of up
to 3% of the total workers' compensation premium income; and
(D) on and after January 1, 2018, 0% of the total workers' compensation premium
income;
(ii) an amount equal to 0.25% of the total workers' compensation premium income to
the state treasurer for credit to the Workplace Safety Account created by Section 
34A-2-701
;
(iii) an amount of up to 0.5% and any remaining assessed percentage of the total
workers' compensation premium income to the state treasurer for credit to the Uninsured
Employers' Fund created under Section 
34A-2-704
; and
(iv) beginning on January 1, 2010, 0.5% of the total workers' compensation premium
income to the state treasurer for credit to the Industrial Accident Restricted Account created in
Section 
34A-2-705
.
(d) (i) The Labor Commission shall determine the amount of the premium assessment
for each year on or before each October 15 of the preceding year. The Labor Commission shall
make this determination following a public hearing. The determination shall be based upon the
recommendations of a qualified actuary.
(ii) The actuary shall recommend a premium assessment rate sufficient to provide
payments of benefits and expenses from the Employers' Reinsurance Fund and to project a
funded condition with assets greater than liabilities by no later than June 30, 2025.
(iii) The actuary shall recommend a premium assessment rate sufficient to provide
payments of benefits and expenses from the Uninsured Employers' Fund and to maintain it at a
funded condition with assets equal to or greater than liabilities.
(iv) At the end of each fiscal year the minimum approximate assets in the Employers'
Reinsurance Fund shall be $5,000,000 which amount shall be adjusted each year beginning in
1990 by multiplying by the ratio that the total workers' compensation premium income for the
preceding calendar year bears to the total workers' compensation premium income for the
calendar year 1988.
(v) The requirements of Subsection (2)(d)(iv) cease when the future annual
disbursements from the Employers' Reinsurance Fund are projected to be less than the
calculations of the corresponding future minimum required assets. The Labor Commission
shall, after a public hearing, determine if the future annual disbursements are less than the
corresponding future minimum required assets from projections provided by the actuary.
(vi) At the end of each fiscal year the minimum approximate assets in the Uninsured
Employers' Fund shall be $2,000,000, which amount shall be adjusted each year beginning in
1990 by multiplying by the ratio that the total workers' compensation premium income for the
preceding calendar year bears to the total workers' compensation premium income for the
calendar year 1988.
(e) A premium assessment that is to be transferred into the General Fund may be
collected on premiums received from Utah public agencies.
(3) An admitted insurer writing title insurance in this state shall pay to the commission,
on or before March 31 in each year, a tax of .45% of the total premium received by either the
insurer or by its agents during the preceding calendar year from title insurance concerning
property located in this state. In calculating this tax, "premium" includes the charges made to
an insured under or to an applicant for a policy or contract of title insurance for:
(a) the assumption by the title insurer of the risks assumed by the issuance of the policy
or contract of title insurance; and
(b) abstracting title, title searching, examining title, or determining the insurability of
title, and every other activity, exclusive of escrow, settlement, or closing charges, whether
denominated premium or otherwise, made by a title insurer, an agent of a title insurer, a title
insurance producer, or any of them.
(4) Beginning July 1, 1986, a former county mutual and a former mutual benefit
association shall pay the premium tax or assessment due under this chapter. Premiums
received after July 1, 1986, shall be considered in determining the tax or assessment.
(5) The following insurers are not subject to the premium tax on health care insurance
that would otherwise be applicable under Subsection (1):
(a) an insurer licensed under Title 31A, Chapter 5, Domestic Stock and Mutual
Insurance Corporations;
(b) an insurer licensed under Title 31A, Chapter 7, Nonprofit Health Service Insurance
Corporations;
(c) an insurer licensed under Title 31A, Chapter 8, Health Maintenance Organizations
and Limited Health Plans;
(d) an insurer licensed under Title 31A, Chapter 9, Insurance Fraternals;
(e) an insurer licensed under Title 31A, Chapter 11, Motor Clubs;
(f) an insurer licensed under Title 31A, Chapter 13, Employee Welfare Funds and
Plans; and
(g) an insurer licensed under Title 31A, Chapter 14, Foreign Insurers.
(6) An insurer issuing multiple policies to an insured may not artificially allocate the
premiums among the policies for purposes of reducing the aggregate premium tax or
assessment applicable to the policies.
(7) The retaliatory provisions of Title 31A, Chapter 3, Department Funding, Fees, and
Taxes, apply to the tax or assessment imposed under this chapter.
Section 17. Section 
59-10-1002.1
 is amended to read:
59-10-1002.1.
Removal of tax credit from tax return and prohibition on claiming
or carrying forward a tax credit -- Conditions for removal and prohibition on claiming or
carrying forward a tax credit -- Commission publishing requirements.
(1) As used in this section, "tax return" means a tax return filed in accordance with this
chapter.
(2) Except as provided in Subsection (4), beginning two taxable years after the
requirements of Subsection (3) are met:
(a) the commission shall remove a tax credit allowed under this part from each tax
return on which the tax credit appears; and
(b) a claimant, estate, or trust filing a tax return may not claim or carry forward the tax
credit.
(3) Except as provided in Subsection (4), the commission shall remove a tax credit
allowed under this part from a tax return and a claimant, estate, or trust filing a tax return may
not claim or carry forward the tax credit as provided in Subsection (2) if:
(a) the total amount of the tax credit claimed or carried forward by all claimants,
estates, or trusts filing tax returns is less than $10,000 per year for three consecutive taxable
years beginning on or after January 1, 2002; and
(b) less than 10 claimants, estates, and trusts per year for the three consecutive taxable
years described in Subsection (3)(a), file a tax return claiming or carrying forward the tax
credit.
(4) This section does not apply to a tax credit under Section 
59-10-1027
.
(5) The commission shall, on or before the November interim meeting of the year after
the taxable year in which the requirements of Subsection (3) are met, report to the Revenue and
Taxation Interim Committee 
by electronic means
 that in accordance with this section:
(a) the commission is required to remove a tax credit from each tax return on which the
tax credit appears; and
(b) a claimant, estate, or trust filing a tax return may not claim or carry forward the tax
credit.
(6) (a) Within a 30-day period after making the report required by Subsection (5), the
commission shall publish a list in accordance with Subsection (6)(b) stating each tax credit that
the commission will remove from a return on which the tax credit appears.
(b) The list shall:
(i) be published on:
(A) the commission's website; and
(B) the public legal notice website in accordance with Section 
45-1-101
;
(ii) include a statement that:
(A) the commission is required to remove the tax credit from each return on which the
tax credit appears; and
(B) the tax credit may not be claimed or carried forward on a return;
(iii) state the taxable year for which the removal described in Subsection (6)(a) takes
effect; and
(iv) remain available for viewing and searching until the commission publishes a new
list in accordance with this Subsection (6).
Section 18. Section 
59-10-1010
 is amended to read:
59-10-1010.
Utah low-income housing tax credit.
(1) As used in this section:
(a) "Allocation certificate" means:
(i) the certificate prescribed by the commission and issued by the Utah Housing
Corporation to each claimant, estate, or trust that specifies the percentage of the annual federal
low-income housing credit that each claimant, estate, or trust may take as an annual tax credit
against a tax imposed by this chapter; or
(ii) a copy of the allocation certificate that the housing sponsor provides to the
claimant, estate, or trust.
(b) "Building" means a qualified low-income building as defined in Section 42(c),
Internal Revenue Code.
(c) "Federal low-income housing credit" means the low-income housing credit under
Section 42, Internal Revenue Code.
(d) "Housing sponsor" means a corporation in the case of a C corporation, a partnership
in the case of a partnership, a corporation in the case of an S corporation, or a limited liability
company in the case of a limited liability company.
(e) "Qualified allocation plan" means the qualified allocation plan adopted by the Utah
Housing Corporation pursuant to Section 42(m), Internal Revenue Code.
(f) "Special low-income housing tax credit certificate" means a certificate:
(i) prescribed by the commission;
(ii) that a housing sponsor issues to a claimant, estate, or trust for a taxable year; and
(iii) that specifies the amount of a tax credit a claimant, estate, or trust may claim under
this section if the claimant, estate, or trust meets the requirements of this section.
(2) (a) For taxable years beginning on or after January 1, 1995, there is allowed a
nonrefundable tax credit against taxes otherwise due under this chapter for a claimant, estate,
or trust issued an allocation certificate.
(b) The tax credit shall be in an amount equal to the greater of the amount of:
(i) federal low-income housing credit to which the claimant, estate, or trust is allowed
during that year multiplied by the percentage specified in an allocation certificate issued by the
Utah Housing Corporation; or
(ii) tax credit specified in the special low-income housing tax credit certificate that the
housing sponsor issues to the claimant, estate, or trust as provided in Subsection (2)(c).
(c) For purposes of Subsection (2)(b)(ii), the tax credit is equal to the product of:
(i) the total amount of low-income housing tax credit under this section that:
(A) a housing sponsor is allowed for a building; and
(B) all of the claimants, estates, and trusts may claim with respect to the building if the
claimants, estates, and trusts meet the requirements of this section; and
(ii) the percentage of tax credit a claimant, estate, or trust may claim:
(A) under this section if the claimant, estate, or trust meets the requirements of this
section; and
(B) as provided in the agreement between the claimant, estate, or trust and the housing
sponsor.
(d) (i) For the calendar year beginning on January 1, 1995, through the calendar year
beginning on January 1, 2015, the aggregate annual tax credit that the Utah Housing
Corporation may allocate for the credit period described in Section 42(f), Internal Revenue
Code, pursuant to this section and Section 
59-7-607
 is an amount equal to the product of:
(A) 12.5 cents; and
(B) the population of Utah.
(ii) For purposes of this section, the population of Utah shall be determined in
accordance with Section 146(j), Internal Revenue Code.
(3) (a) By October 1, 1994, the Utah Housing Corporation shall determine criteria and
procedures for allocating the tax credit under this section and Section 
59-7-607
 and incorporate
the criteria and procedures into the Utah Housing Corporation's qualified allocation plan.
(b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a)
based on:
(i) the number of affordable housing units to be created in Utah for low and moderate
income persons in the residential housing development of which the building is a part;
(ii) the level of area median income being served by the development;
(iii) the need for the tax credit for the economic feasibility of the development; and
(iv) the extended period for which the development commits to remain as affordable
housing.
(4) (a) The following may apply to the Utah Housing Corporation for a tax credit under
this section:
(i) any housing sponsor that is a claimant, estate, or trust if that housing sponsor has
received an allocation of the federal low-income housing credit; or
(ii) any applicant for an allocation of the federal low-income housing credit if that
applicant is a claimant, estate, or trust.
(b) The Utah Housing Corporation may not require fees for applications of the tax
credit under this section in addition to those fees required for applications for the federal
low-income housing credit.
(5) (a) The Utah Housing Corporation shall determine the amount of the tax credit to
allocate to a qualifying housing sponsor in accordance with the qualified allocation plan of the
Utah Housing Corporation.
(b) (i) The Utah Housing Corporation shall allocate the tax credit to housing sponsors
by issuing an allocation certificate to qualifying housing sponsors.
(ii) The allocation certificate under Subsection (5)(b)(i) shall specify the allowed
percentage of the federal low-income housing credit as determined by the Utah Housing
Corporation.
(c) The percentage specified in an allocation certificate may not exceed 100% of the
federal low-income housing credit.
(6) A housing sponsor shall provide a copy of the allocation certificate to each
claimant, estate, or trust that is issued a special low-income housing tax credit certificate.
(7) (a) A housing sponsor shall provide to the commission a list of:
(i) the claimants, estates, and trusts issued a special low-income housing tax credit
certificate; and
(ii) for each claimant, estate, or trust described in Subsection (7)(a)(i), the amount of
tax credit listed on the special low-income housing tax credit certificate.
(b) A housing sponsor shall provide the list required by Subsection (7)(a):
(i) to the commission;
(ii) on a form provided by the commission; and
(iii) with the housing sponsor's tax return for each taxable year for which the housing
sponsor issues a special low-income housing tax credit certificate described in this Subsection
(7).
(8) (a) All elections made by the claimant, estate, or trust pursuant to Section 42,
Internal Revenue Code, shall apply to this section.
(b) (i) If a claimant, estate, or trust is required to recapture a portion of any federal
low-income housing credit, the claimant, estate, or trust shall also be required to recapture a
portion of any state tax credits authorized by this section.
(ii) The state recapture amount shall be equal to the percentage of the state tax credit
that equals the proportion the federal recapture amount bears to the original federal low-income
housing credit amount subject to recapture.
(9) (a) Any tax credits returned to the Utah Housing Corporation in any year may be
reallocated within the same time period as provided in Section 42, Internal Revenue Code.
(b) Tax credits that are unallocated by the Utah Housing Corporation in any year may
be carried over for allocation in the subsequent year.
(10) (a) Amounts otherwise qualifying for the tax credit, but not allowable because the
tax credit exceeds the tax, may be carried back three years or may be carried forward five years
as a tax credit.
(b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:
(i) before the application of the tax credits earned in the current year; and
(ii) on a first-earned first-used basis.
(11) Any tax credit taken in this section may be subject to an annual audit by the
commission.
(12) The Utah Housing Corporation shall 
annually
 provide an [
annual
] 
electronic
report to the Revenue and Taxation Interim Committee which shall include at least:
(a) the purpose and effectiveness of the tax credits; and
(b) the benefits of the tax credits to the state.
(13) The commission may, in consultation with the Utah Housing Corporation,
promulgate rules to implement this section.
Section 19. Section 
59-10-1012
 is amended to read:
59-10-1012.
Tax credits for research activities conducted in the state -- Carry
forward -- Commission to report modification or repeal of certain federal provisions --
Revenue and Taxation Interim Committee study.
(1) (a) A claimant, estate, or trust meeting the requirements of this section may claim
the following nonrefundable tax credits:
(i) a research tax credit of 5% of the claimant's, estate's, or trust's qualified research
expenses for the current taxable year that exceed the base amount provided for under
Subsection (3);
(ii) a tax credit for a payment to a qualified organization for basic research as provided
in Section 41(e), Internal Revenue Code of 5% for the current taxable year that exceed the base
amount provided for under Subsection (3); and
(iii) a tax credit equal to 7.5% of the claimant's, estate's, or trust's qualified research
expenses for the current taxable year.
(b) Subject to Subsection (4), a claimant, estate, or trust may claim a tax credit under:
(i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the claimant, estate,
or trust incurs the qualified research expenses; or
(ii) Subsection (1)(a)(ii), for the taxable year for which the claimant, estate, or trust
makes the payment to the qualified organization.
(c) The tax credits provided for in this section do not include the alternative
incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
(2) Except as specifically provided for in this section:
(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
Section 41, Internal Revenue Code; and
(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
the tax credits authorized under Subsection (1).
(3) For purposes of this section:
(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
Internal Revenue Code, except that:
(i) the base amount does not include the calculation of the alternative incremental
credit provided for in Section 41(c)(4), Internal Revenue Code;
(ii) a claimant's, estate's, or trust's gross receipts include only those gross receipts
attributable to sources within this state as provided in Section 
59-10-118
; and
(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
the base amount, a claimant, estate, or trust:
(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B),
Internal Revenue Code, regardless of whether the claimant, estate, or trust meets the
requirements of Section 41(c)(3)(B)(i)(I) or (II), Internal Revenue Code; and
(B) may not revoke an election to be treated as a start-up company under Subsection
(3)(a)(iii)(A);
(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
that the term includes only basic research conducted in this state;
(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
that the term includes only qualified research conducted in this state;
(d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
Revenue Code, except that the term includes only:
(i) in-house research expenses incurred in this state; and
(ii) contract research expenses incurred in this state; and
(e) a tax credit provided for in this section is not terminated if a credit terminates under
Section 41, Internal Revenue Code.
(4) (a) If the amount of a tax credit claimed by a claimant, estate, or trust under
Subsection (1)(a)(i) or (ii) exceeds the claimant's, estate's, or trust's tax liability under this
chapter for a taxable year, the amount of the tax credit exceeding the tax liability:
(i) may be carried forward for a period that does not exceed the next 14 taxable years;
and
(ii) may not be carried back to a taxable year preceding the current taxable year.
(b) A claimant, estate, or trust may not carry forward the tax credit allowed by
Subsection (1)(a)(iii).
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules for purposes of this section prescribing a certification process for
qualified organizations to ensure that amounts paid to the qualified organizations are for basic
research conducted in this state.
(6) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
commission shall report the modification or repeal 
by electronic means
 to the Revenue and
Taxation Interim Committee within 60 days after the day on which the modification or repeal
becomes effective.
(7) (a) The Revenue and Taxation Interim Committee shall review the tax credits
provided for in this section on or before October 1 of the year after the year in which the
commission reports under Subsection (6) a modification or repeal of a provision of Section 41,
Internal Revenue Code.
(b) Notwithstanding Subsection (7)(a), the Revenue and Taxation Interim Committee is
not required to review the tax credits provided for in this section if the only modification to a
provision of Section 41, Internal Revenue Code, is the extension of the termination date
provided for in Section 41(h), Internal Revenue Code.
(c) The Revenue and Taxation Interim Committee shall address in a review under this
section:
(i) the cost of the tax credits provided for in this section;
(ii) the purpose and effectiveness of the tax credits provided for in this section;
(iii) whether the tax credits provided for in this section benefit the state; and
(iv) whether the tax credits provided for in this section should be:
(A) continued;
(B) modified; or
(C) repealed.
(d) If the Revenue and Taxation Interim Committee reviews the tax credits provided
for in this section, the committee shall report its findings to the Legislative Management
Committee on or before the November interim meeting of the year in which the Revenue and
Taxation Interim Committee reviews the tax credits.
Section 20. Section 
59-10-1013
 is amended to read:
59-10-1013.
Tax credits for machinery, equipment, or both primarily used for
conducting qualified research or basic research -- Carry forward -- Commission to report
modification or repeal of certain federal provisions -- Revenue and Taxation Interim
Committee study.
(1) As used in this section:
(a) "Basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
that the term includes only basic research conducted in this state.
(b) "Equipment" includes:
(i) a computer;
(ii) computer equipment; and
(iii) computer software.
(c) "Purchase price":
(i) includes the cost of installing an item of machinery or equipment; and
(ii) does not include a tax imposed under Chapter 12, Sales and Use Tax Act, on an
item of machinery or equipment.
(d) "Qualified organization" is as defined in Section 41(e)(6), Internal Revenue Code.
(e) "Qualified research" is as defined in Section 41(d), Internal Revenue Code, except
that the term includes only qualified research conducted in this state.
(2) (a) Except as provided in Subsection (2)(c), for taxable years beginning on or after
January 1, 1999, but beginning before December 31, 2010, a claimant, estate, or trust meeting
the requirements of this section may claim the following nonrefundable tax credits:
(i) a tax credit of 6% of the purchase price of machinery, equipment, or both:
(A) purchased by the claimant, estate, or trust during the taxable year;
(B) that is subject to a tax under Chapter 12, Sales and Use Tax Act; and
(C) that is primarily used to conduct qualified research in this state; and
(ii) a tax credit of 6% of the purchase price paid by the claimant, estate, or trust for
machinery, equipment, or both:
(A) purchased by the claimant, estate, or trust during the taxable year;
(B) that is subject to a tax under Chapter 12, Sales and Use Tax Act;
(C) that is donated to a qualified organization; and
(D) that is primarily used to conduct basic research in this state.
(b) Subject to Subsection (4), a claimant, estate, or trust may claim a tax credit under
this section for the taxable year for which the claimant, estate, or trust purchases the machinery,
equipment, or both.
(c) If a claimant, estate, or trust qualifies for a tax credit under Subsection (2)(a) for a
purchase of machinery, equipment, or both, the claimant, estate, or trust may not claim the tax
credit or carry the tax credit forward if the machinery, equipment, or both, is primarily used to
conduct qualified research in the state for a time period that is less than 12 consecutive months.
(3) Notwithstanding Section 41(h), Internal Revenue Code, a tax credit provided for in
this section is not terminated if a credit terminates under Section 41, Internal Revenue Code.
(4) If the amount of a tax credit claimed by a claimant, estate, or trust under this section
exceeds a claimant's, estate's, or trust's tax liability under this chapter for a taxable year, the
amount of the tax credit exceeding the tax liability:
(a) may be carried forward for a period that does not exceed the next 14 taxable years;
and
(b) may not be carried back to a taxable year preceding the current taxable year.
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules for purposes of this section prescribing a certification process for
qualified organizations to ensure that machinery, equipment, or both provided to the qualified
organization is to be primarily used to conduct basic research in this state.
(6) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
commission shall report the modification or repeal 
by electronic means
 to the Revenue and
Taxation Interim Committee within 60 days after the day on which the modification or repeal
becomes effective.
(7) (a) The Revenue and Taxation Interim Committee shall review the tax credits
provided for in this section on or before October 1 of the year after the year in which the
commission reports under Subsection (6) a modification or repeal of a provision of Section 41,
Internal Revenue Code.
(b) Notwithstanding Subsection (7)(a), the Revenue and Taxation Interim Committee is
not required to review the tax credits provided for in this section if the only modification to a
provision of Section 41, Internal Revenue Code, is the extension of the termination date
provided for in Section 41(h), Internal Revenue Code.
(c) The Revenue and Taxation Interim Committee shall address in a review under this
section the:
(i) cost of the tax credits provided for in this section;
(ii) purpose and effectiveness of the tax credits provided for in this section;
(iii) whether the tax credits provided for in this section benefit the state; and
(iv) whether the tax credits provided for in this section should be:
(A) continued;
(B) modified; or
(C) repealed.
(d) If the Revenue and Taxation Interim Committee reviews the tax credits provided
for in this section, the committee shall report its findings to the Legislative Management
Committee on or before the November interim meeting of the year in which the Revenue and
Taxation Interim Committee reviews the tax credits.
Section 21. Section 
59-10-1029
 is amended to read:
59-10-1029.
Nonrefundable alternative energy development tax credit.
(1) As used in this section:
(a) "Alternative energy entity" is as defined in Section 
63M-4-502
.
(b) "Alternative energy project" is as defined in Section 
63M-4-502
.
(c) "Office" is as defined in Section 
63M-4-401
.
(2) Subject to the other provisions of this section, an alternative energy entity may
claim a nonrefundable tax credit for alternative energy development as provided in this section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
(4) An alternative energy entity may carry forward a tax credit under this section for a
period that does not exceed the next seven taxable years if:
(a) the alternative energy entity is allowed to claim a tax credit under this section for a
taxable year; and
(b) the amount of the tax credit exceeds the alternative energy entity's tax liability
under this chapter for that taxable year.
(5) (a) On or before October 1, 2017, and every five years after October 1, 2017, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
(b) For purposes of the study required by this Subsection (5), the office shall provide
the following information to the Revenue and Taxation Interim Committee 
by electronic
means
:
(i) the amount of tax credit that the office grants to each alternative energy entity for
each taxable year;
(ii) the new state revenues generated by each alternative energy project;
(iii) the information contained in the office's latest report to the Legislature under
Section 
63M-4-505
; and
(iv) any other information that the Revenue and Taxation Interim Committee requests.
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 22. Section 
59-10-1030
 is amended to read:
59-10-1030.
Nonrefundable alternative energy manufacturing tax credit.
(1) As used in this section:
(a) "Alternative energy entity" [
is as
] 
means the same as that term is
 defined in Section
63N-2-702
.
(b) "Alternative energy manufacturing project" [
is as
] 
means the same as that term is
defined in Section 
63N-2-702
.
(c) "New incremental job with the state" means the same as that term is defined in
Section 
63N-2-702
.
(d) "New state revenues" means the same as that term is defined in Section 
63N-2-702
.
[
(c)
] 
(e)
 "Office" means the Governor's Office of Economic Development.
(2) Subject to the other provisions of this section, an alternative energy entity may
claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63N, Chapter 2, Part 7, Alternative
Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
(4) An alternative energy entity may carry forward a tax credit under this section for a
period that does not exceed the next seven taxable years if:
(a) the alternative energy entity is allowed to claim a tax credit under this section for a
taxable year; and
(b) the amount of the tax credit exceeds the alternative energy entity's tax liability
under this chapter for that taxable year.
(5) (a) On or before October 1, 2017, and every five years after October 1, 2017, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
(b) For purposes of the study required by this Subsection (5), the office shall provide
the following information to the Revenue and Taxation Interim Committee 
by electronic
means
:
(i) the amount of tax credit that the office grants to each alternative energy entity for
each taxable year; 
(ii) the new state revenues generated by each alternative energy manufacturing project;
(iii) estimates for each of the next five calendar years of the following:
(A) the amount of tax credits that the office will grant;
(B) the amount of new state revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
[
(iii)
] 
(iv)
 the information contained in the office's latest report to the Legislature under
Section 
63N-2-705
; and
[
(iv)
] 
(v)
 any other information that the Revenue and Taxation Interim Committee
requests.
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 23. Section 
59-10-1107
 is amended to read:
59-10-1107.
Refundable economic development tax credit.
(1) As used in this section:
(a) "Business entity" means a claimant, estate, or trust that meets the definition of
"business entity" as defined in Section 
63N-2-103
.
(b) "New incremental jobs" means the same as that term is defined in Section
63N-2-103
.
(c) "New state revenues" means the same as that term is defined in Section 
63N-2-103
.
[
(b)
] 
(d)
 "Office" means the Governor's Office of Economic Development.
(2) Subject to the other provisions of this section, a business entity may claim a
refundable tax credit for economic development.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to the business entity for the taxable year.
(4) (a) In accordance with any rules prescribed by the commission under Subsection
(4)(b), the commission shall make a refund to a business entity that claims a tax credit under
this section if the amount of the tax credit exceeds the business entity's tax liability for a
taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a business entity as
required by Subsection (4)(a).
(5) (a) On or before October 1, 2013, and every five years after October 1, 2013, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
(b) For purposes of the study required by this Subsection (5), the office shall provide
the following information to the Revenue and Taxation Interim Committee 
by electronic
means
:
(i) the amount of tax credit the office grants to each taxpayer for each calendar year;
(ii) the criteria the office uses in granting a tax credit;
(iii) the new state revenues generated by each taxpayer for each calendar year;
(iv) estimates for each of the next five calendar years of the following:
(A) the amount of tax credits that the office will grant;
(B) the amount of new state revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
[
(iv)
] 
(v)
 the information contained in the office's latest report to the Legislature under
Section 
63N-2-106
; and
[
(v)
] 
(vi)
 any other information that the Revenue and Taxation Interim Committee
requests.
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 24. Section 
59-10-1108
 is amended to read:
59-10-1108.
Refundable motion picture tax credit.
(1) As used in this section:
(a) "Motion picture company" means a claimant, estate, or trust that meets the
definition of a motion picture company under Section 
63N-8-102
.
(b) "Office" means the Governor's Office of Economic Development.
(c) "State-approved production" has the same meaning as defined in Section
63N-8-102
.
(2) For taxable years beginning on or after January 1, 2009, a motion picture company
may claim a refundable tax credit for a state-approved production.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to a motion picture company under Section
63N-8-103
 for the taxable year.
(4) (a) In accordance with any rules prescribed by the commission under Subsection
(4)(b), the commission shall make a refund to a motion picture company that claims a tax
credit under this section if the amount of the tax credit exceeds the motion picture company's
tax liability for the taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a motion picture
company as required by Subsection (4)(a).
(5) (a) On or before October 1, 2014, and every five years after October 1, 2014, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
(b) For purposes of the study required by this Subsection (5), the office shall provide
the following information to the Revenue and Taxation Interim Committee 
by electronic
means
:
(i) 
(A)
 the amount of tax credit the office grants to each taxpayer for each calendar
year; 
and
(B) estimates of the amount of tax credit that the office will grant for each of the next
five calendar years;
(ii) the criteria the office uses in granting a tax credit;
(iii) the dollars left in the state, as defined in Section 
63N-8-102
, by each motion
picture company for each calendar year;
(iv) the information contained in the office's latest report to the Legislature under
Section 
63N-8-105
; and
(v) any other information requested by the Revenue and Taxation Interim Committee.
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 25. Section 
59-10-1304
 is amended to read:
59-10-1304.
Removal of designation and prohibitions on collection for certain
contributions on income tax return -- Conditions for removal and prohibitions on
collection -- Commission publication requirements.
(1) (a) If a contribution or combination of contributions described in Subsection (1)(b)
generate less than $30,000 per year for three consecutive years, the commission shall remove
the designation for the contribution from the individual income tax return and may not collect
the contribution from a resident or nonresident individual beginning two taxable years after the
three-year period for which the contribution generates less than $30,000 per year.
(b) The following contributions apply to Subsection (1)(a):
(i) the contribution provided for in Section 
59-10-1306
;
(ii) the sum of the contributions provided for in Subsection 
59-10-1307
(1);
(iii) the contribution provided for in Section 
59-10-1308
;
(iv) the contribution provided for in Section 
59-10-1310
;
(v) the contribution provided for in Section 
59-10-1315
;
(vi) the sum of the contributions provided for in:
(A) Section 
59-10-1316
; and
(B) Section 
59-10-1317
; or
(vii) the contribution provided for in Section 
59-10-1318
.
(2) If the commission removes the designation for a contribution under Subsection (1),
the commission shall report to the Revenue and Taxation Interim Committee 
by electronic
means
 that the commission removed the designation on or before the November interim
meeting of the year in which the commission determines to remove the designation.
(3) (a) Within a 30-day period after making the report required by Subsection (2), the
commission shall publish a list in accordance with Subsection (3)(b) stating each contribution
that the commission will remove from the individual income tax return.
(b) The list shall:
(i) be published on:
(A) the commission's website; and
(B) the public legal notice website in accordance with Section 
45-1-101
;
(ii) include a statement that the commission:
(A) is required to remove the contribution from the individual income tax return; and
(B) may not collect the contribution;
(iii) state the taxable year for which the removal described in Subsection (3)(a) takes
effect; and
(iv) remain available for viewing and searching until the commission publishes a new
list in accordance with this Subsection (3).
Section 26. Section 
59-12-103.1
 is amended to read:
59-12-103.1.
Action by Supreme Court of the United States authorizing or action
by Congress permitting a state to require certain sellers to collect a sales or use tax --
Collection of tax by commission -- Commission report to Revenue and Taxation Interim
Committee -- Revenue and Taxation Interim Committee study -- Division of Finance
requirement to make certain deposits.
(1) Except as provided in Section 
59-12-107.1
, a seller shall remit a tax to the
commission as provided in Section 
59-12-107
 if:
(a) the Supreme Court of the United States issues a decision authorizing a state to
require the following sellers to collect a sales or use tax:
(i) a seller that does not meet one or more of the criteria described in Subsection
59-12-107
(2)(a); or
(ii) a seller that is not a seller required to pay or collect and remit sales and use taxes
under Subsection 
59-12-107
(2)(b); or
(b) Congress permits the state to require the following sellers to collect a sales or use
tax:
(i) a seller that does not meet one or more of the criteria described in Subsection
59-12-107
(2)(a); or
(ii) a seller that is not a seller required to pay or collect and remit sales and use taxes
under Subsection 
59-12-107
(2)(b).
(2) The commission shall:
(a) collect the tax described in Subsection (1) from the seller:
(i) to the extent:
(A) authorized by the Supreme Court of the United States; or
(B) permitted by Congress; and
(ii) beginning on the first day of a calendar quarter as prescribed by the Revenue and
Taxation Interim Committee; and
(b) make a report to the Revenue and Taxation Interim Committee 
by electronic
means
:
(i) regarding the actions taken by:
(A) the Supreme Court of the United States; or
(B) Congress; 
and
(ii) (A) stating the amount of state revenue collected at the time of the report, if any;
and
(B) estimating the state sales and use tax rate reduction that would offset the amount of
state revenue estimated to be collected for the current fiscal year and the next fiscal year; and
[
(iii) (A) at
] 
(c) report to the Revenue and Taxation Interim Committee at:
(i)
 the Revenue and Taxation Interim Committee meeting immediately following the
day on which the actions of the Supreme Court of the United States or Congress become
effective; and
[
(B)
] 
(ii)
 any other meeting of the Revenue and Taxation Interim Committee as
requested by the chairs of the committee.
(3) The Revenue and Taxation Interim Committee shall after [
hearing
] 
receiving
 the
commission's [
report
] 
reports
 under [
Subsection
] 
Subsections
 (2)(b) 
and (c)
:
(a) review the actions taken by:
(i) the Supreme Court of the United States; or
(ii) Congress;
(b) direct the commission regarding the day on which the commission is required to
collect the tax described in Subsection (1); and
(c) make recommendations to the Legislative Management Committee:
(i) regarding whether as a result of the actions of the Supreme Court of the United
States or Congress any provisions of this chapter should be amended or repealed; and
(ii) within a one-year period after the day on which the commission makes a report
under Subsection (2)[
(b)
]
(c)
.
(4) The Division of Finance shall deposit a portion of the revenue collected under this
section into the Remote Sales Restricted Account as required by Section 
59-12-103.2
.
Section 27. Section 
59-12-104
 is amended to read:
59-12-104.
Exemptions.
Exemptions from the taxes imposed by this chapter are as follows:
(1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
under Chapter 13, Motor and Special Fuel Tax Act;
(2) subject to Section 
59-12-104.6
, sales to the state, its institutions, and its political
subdivisions; however, this exemption does not apply to sales of:
(a) construction materials except:
(i) 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
(ii) 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; or
(b) tangible personal property in connection with the construction, operation,
maintenance, repair, or replacement of a project, as defined in Section 
11-13-103
, or facilities
providing additional project capacity, as defined in Section 
11-13-103
;
(3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
(i) the proceeds of each sale do not exceed $1; and
(ii) the seller or operator of the vending machine reports an amount equal to 150% of
the cost of the item described in Subsection (3)(b) as goods consumed; and
(b) Subsection (3)(a) applies to:
(i) food and food ingredients; or
(ii) prepared food;
(4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
(i) alcoholic beverages;
(ii) food and food ingredients; or
(iii) prepared food;
(b) sales of tangible personal property or a product transferred electronically:
(i) to a passenger;
(ii) by a commercial airline carrier; and
(iii) during a flight for in-flight consumption or in-flight use by the passenger; or
(c) services related to Subsection (4)(a) or (b);
(5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
and equipment:
(A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
North American Industry Classification System of the federal Executive Office of the
President, Office of Management and Budget; and
(II) for:
(Aa) installation in an aircraft, including services relating to the installation of parts or
equipment in the aircraft;
(Bb) renovation of an aircraft; or
(Cc) repair of an aircraft; or
(B) for installation in an aircraft operated by a common carrier in interstate or foreign
commerce; or
(ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
aircraft operated by a common carrier in interstate or foreign commerce; and
(b) notwithstanding the time period of Subsection 
59-1-1410
(8) for filing for a refund,
a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
refund:
(i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
(ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
(iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
the sale prior to filing for the refund;
(iv) for sales and use taxes paid under this chapter on the sale;
(v) in accordance with Section 
59-1-1410
; and
(vi) subject to any extension allowed for filing for a refund under Section 
59-1-1410
, if
the person files for the refund on or before September 30, 2011;
(6) 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;
(7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
property if the cleaning or washing of the tangible personal property is not assisted cleaning or
washing of tangible personal property;
(b) if a seller that sells at the same business location assisted cleaning or washing of
tangible personal property and cleaning or washing of tangible personal property that is not
assisted cleaning or washing of tangible personal property, the exemption described in
Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
or washing of the tangible personal property; and
(c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
Utah Administrative Rulemaking Act, the commission may make rules:
(i) governing the circumstances under which sales are at the same business location;
and
(ii) establishing the procedures and requirements for a seller to separately account for
sales of assisted cleaning or washing of tangible personal property;
(8) 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;
(9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
this state if the vehicle is:
(a) not registered in this state; and
(b) (i) not used in this state; or
(ii) used in this state:
(A) if the vehicle is not used to conduct business, for a time period that does not
exceed the longer of:
(I) 30 days in any calendar year; or
(II) the time period necessary to transport the vehicle to the borders of this state; or
(B) if the vehicle is used to conduct business, for the time period necessary to transport
the vehicle to the borders of this state;
(10) (a) amounts paid for an item described in Subsection (10)(b) if:
(i) the item is intended for human use; and
(ii) (A) a prescription was issued for the item; or
(B) the item was purchased by a hospital or other medical facility; and
(b) (i) Subsection (10)(a) applies to:
(A) a drug;
(B) a syringe; or
(C) a stoma supply; and
(ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may by rule define the terms:
(A) "syringe"; or
(B) "stoma supply";
(11) purchases or leases exempt under Section 
19-12-201
;
(12) (a) sales of an item described in Subsection (12)(c) served by:
(i) the following if the item described in Subsection (12)(c) is not available to the
general public:
(A) a church; or
(B) a charitable institution;
(ii) an institution of higher education if:
(A) the item described in Subsection (12)(c) is not available to the general public; or
(B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
offered by the institution of higher education; or
(b) sales of an item described in Subsection (12)(c) provided for a patient by:
(i) a medical facility; or
(ii) a nursing facility; and
(c) Subsections (12)(a) and (b) apply to:
(i) food and food ingredients;
(ii) prepared food; or
(iii) alcoholic beverages;
(13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
or a product transferred electronically by a person:
(i) regardless of the number of transactions involving the sale of that tangible personal
property or product transferred electronically by that person; and
(ii) not regularly engaged in the business of selling that type of tangible personal
property or product transferred electronically;
(b) this Subsection (13) does not apply if:
(i) the sale is one of a series of sales of a character to indicate that the person is
regularly engaged in the business of selling that type of tangible personal property or product
transferred electronically;
(ii) the person holds that person out as regularly engaged in the business of selling that
type of tangible personal property or product transferred electronically;
(iii) the person sells an item of tangible personal property or product transferred
electronically that the person purchased as a sale that is exempt under Subsection (25); or
(iv) the sale is of a vehicle or vessel 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 fair market
value of the vehicle or vessel being sold at the time of the sale as determined by the
commission; and
(c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission shall make rules establishing the circumstances under which:
(i) a person is regularly engaged in the business of selling a type of tangible personal
property or product transferred electronically;
(ii) a sale of tangible personal property or a product transferred electronically is one of
a series of sales of a character to indicate that a person is regularly engaged in the business of
selling that type of tangible personal property or product transferred electronically; or
(iii) a person holds that person out as regularly engaged in the business of selling a type
of tangible personal property or product transferred electronically;
(14) (a) amounts paid or charged for a purchase or lease:
(i) by a manufacturing facility located in the state; and
(ii) of machinery, equipment, or normal operating repair or replacement parts if the
machinery, equipment, or normal operating repair or replacement parts have an economic life
of three or more years and are used:
(A) in the manufacturing process to manufacture an item sold as tangible personal
property; or
(B) for a scrap recycler, to process an item sold as tangible personal property;
(b) amounts paid or charged for a purchase or lease:
(i) by an establishment:
(A) described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS Code
213113, Support Activities for Coal Mining, 213114, Support Activities for Metal Mining, or
213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining, of the 2002 North
American Industry Classification System of the federal Executive Office of the President,
Office of Management and Budget; and
(B) located in the state; and
(ii) of machinery, equipment, or normal operating repair or replacement parts if the
machinery, equipment, or normal operating repair or replacement parts have an economic life
of three or more years and are used in:
(A) the production process to produce an item sold as tangible personal property;
(B) research and development;
(C) transporting, storing, or managing tailings, overburden, or similar waste materials
produced from mining;
(D) developing or maintaining a road, tunnel, excavation, or similar feature used in
mining; or
(E) preventing, controlling, or reducing dust or other pollutants from mining;
(c) amounts paid or charged for a purchase or lease:
(i) by an establishment:
(A) described in NAICS Code 518112, Web Search Portals, of the 2002 North
American Industry Classification System of the federal Executive Office of the President,
Office of Management and Budget; and
(B) located in the state; and
(ii) of machinery, equipment, or normal operating repair or replacement parts if the
machinery, equipment, or normal operating repair or replacement parts:
(A) are used in the operation of the web search portal; and
(B) have an economic life of three or more years; 
and
(d) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
Utah Administrative Rulemaking Act, the commission:
(i) shall by rule define the term "establishment"; and
(ii) may by rule define what constitutes:
(A) processing an item sold as tangible personal property;
(B) the production process, to produce an item sold as tangible personal property; or
(C) research and development; [
and
]
[
(e) on or before October 1, 2016, and every five years after October 1, 2016, the
commission shall:
]
[
(i) review the exemptions described in this Subsection (14) and make
recommendations to the Revenue and Taxation Interim Committee concerning whether the
exemptions should be continued, modified, or repealed; and
]
[
(ii) include in its report:
]
[
(A) an estimate of the cost of the exemptions;
]
[
(B) the purpose and effectiveness of the exemptions; and
]
[
(C) the benefits of the exemptions to the state;
]
(15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
(i) tooling;
(ii) special tooling;
(iii) support equipment;
(iv) special test equipment; or
(v) parts used in the repairs or renovations of tooling or equipment described in
Subsections (15)(a)(i) through (iv); and
(b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
(i) the tooling, equipment, or parts are 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; and
(ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
title to the tooling, equipment, or parts is vested in the United States government as evidenced
by:
(A) a government identification tag placed on the tooling, equipment, or parts; or
(B) listing on a government-approved property record if placing a government
identification tag on the tooling, equipment, or parts is impractical;
(16) sales of newspapers or newspaper subscriptions;
(17) (a) except as provided in Subsection (17)(b), tangible personal property or a
product transferred electronically 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:
(i) the bill of sale or other written evidence of value of the vehicle being sold and the
vehicle being traded in; or
(ii) 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; and
(b) Subsection (17)(a) does not apply to the following items of tangible personal
property or products transferred electronically traded in as full or part payment of the purchase
price:
(i) money;
(ii) electricity;
(iii) water;
(iv) gas; or
(v) steam;
(18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
or a product transferred electronically used or consumed primarily and directly in farming
operations, regardless of whether the tangible personal property or product transferred
electronically:
(A) becomes part of real estate; or
(B) is installed by a:
(I) farmer;
(II) contractor; or
(III) subcontractor; or
(ii) sales of parts used in the repairs or renovations of tangible personal property or a
product transferred electronically if the tangible personal property or product transferred
electronically is exempt under Subsection (18)(a)(i); and
(b) amounts paid or charged for the following are subject to the taxes imposed by this
chapter:
(i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
incidental to farming:
(I) machinery;
(II) equipment;
(III) materials; or
(IV) supplies; and
(B) tangible personal property that is considered to be used in a manner that is
incidental to farming includes:
(I) hand tools; or
(II) maintenance and janitorial equipment and supplies;
(ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
transferred electronically if the tangible personal property or product transferred electronically
is used in an activity other than farming; and
(B) tangible personal property or a product transferred electronically that is considered
to be used in an activity other than farming includes:
(I) office equipment and supplies; or
(II) equipment and supplies used in:
(Aa) the sale or distribution of farm products;
(Bb) research; or
(Cc) transportation; or
(iii) a vehicle required to be registered by the laws of this state during the period
ending two years after the date of the vehicle's purchase;
(19) sales of hay;
(20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
garden, farm, or other agricultural produce is sold by:
(a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
agricultural produce;
(b) an employee of the producer described in Subsection (20)(a); or
(c) a member of the immediate family of the producer described in Subsection (20)(a);
(21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
(22) 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;
(23) a product stored in the state for resale;
(24) (a) purchases of a product if:
(i) the product is:
(A) purchased outside of this state;
(B) brought into this state:
(I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
(II) by a nonresident person who is not living or working in this state at the time of the
purchase;
(C) used for the personal use or enjoyment of the nonresident person described in
Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
(D) not used in conducting business in this state; and
(ii) for:
(A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
the product for a purpose for which the product is designed occurs outside of this state;
(B) a boat, the boat is registered outside of this state; or
(C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
outside of this state;
(b) the exemption provided for in Subsection (24)(a) does not apply to:
(i) a lease or rental of a product; or
(ii) a sale of a vehicle exempt under Subsection (33); and
(c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
purposes of Subsection (24)(a), the commission may by rule define what constitutes the
following:
(i) conducting business in this state if that phrase has the same meaning in this
Subsection (24) as in Subsection (63);
(ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
as in Subsection (63); or
(iii) a purpose for which a product is designed if that phrase has the same meaning in
this Subsection (24) as in Subsection (63);
(25) a product 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;
(26) a product 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, Local Sales and Use Tax Act, and no adjustment is allowed if
the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
Act;
(27) any sale of a service described in Subsections 
59-12-103
(1)(b), (c), and (d) to a
person for use in compounding a service taxable under the subsections;
(28) purchases made in accordance with the special supplemental nutrition program for
women, infants, and children established in 42 U.S.C. Sec. 1786;
(29) sales or leases of rolls, rollers, refractory brick, electric motors, or other
replacement parts used in the furnaces, mills, or 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;
(30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
(a) not registered in this state; and
(b) (i) not used in this state; or
(ii) used in this state:
(A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
time period that does not exceed the longer of:
(I) 30 days in any calendar year; or
(II) the time period necessary to transport the boat, boat trailer, or outboard motor to
the borders of this state; or
(B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
state;
(31) sales of aircraft manufactured in Utah;
(32) amounts paid for the purchase of telecommunications service for purposes of
providing telecommunications service;
(33) sales, leases, or uses of the following:
(a) a vehicle by an authorized carrier; or
(b) tangible personal property that is installed on a vehicle:
(i) sold or leased to or used by an authorized carrier; and
(ii) before the vehicle is placed in service for the first time;
(34) (a) 45% of the sales price of any new manufactured home; and
(b) 100% of the sales price of any used manufactured home;
(35) sales relating to schools and fundraising sales;
(36) sales or rentals of durable medical equipment if:
(a) a person presents a prescription for the durable medical equipment; and
(b) the durable medical equipment is used for home use only;
(37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
Section 
72-11-102
; and
(b) the commission shall by rule determine the method for calculating sales exempt
under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
(38) sales to a ski resort of:
(a) snowmaking equipment;
(b) ski slope grooming equipment;
(c) passenger ropeways as defined in Section 
72-11-102
; or
(d) parts used in the repairs or renovations of equipment or passenger ropeways
described in Subsections (38)(a) through (c);
(39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
(40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
amusement, entertainment, or recreation an unassisted amusement device as defined in Section
59-12-102
;
(b) if a seller that sells or rents at the same business location the right to use or operate
for amusement, entertainment, or recreation one or more unassisted amusement devices and
one or more assisted amusement devices, the exemption described in Subsection (40)(a)
applies if the seller separately accounts for the sales or rentals of the right to use or operate for
amusement, entertainment, or recreation for the assisted amusement devices; and
(c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
Utah Administrative Rulemaking Act, the commission may make rules:
(i) governing the circumstances under which sales are at the same business location;
and
(ii) establishing the procedures and requirements for a seller to separately account for
the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
assisted amusement devices;
(41) (a) sales of photocopies by:
(i) a governmental entity; or
(ii) an entity within the state system of public education, including:
(A) a school; or
(B) the State Board of Education; or
(b) sales of publications by a governmental entity;
(42) amounts paid for admission to an athletic event at an institution of higher
education that is subject to the provisions of Title IX of the Education Amendments of 1972,
20 U.S.C. Sec. 1681 et seq.;
(43) (a) sales made to or by:
(i) an area agency on aging; or
(ii) a senior citizen center owned by a county, city, or town; or
(b) sales made by a senior citizen center that contracts with an area agency on aging;
(44) sales or leases of semiconductor fabricating, processing, research, or development
materials regardless of whether the semiconductor fabricating, processing, research, or
development materials:
(a) actually come into contact with a semiconductor; or
(b) ultimately become incorporated into real property;
(45) an amount paid by or charged to a purchaser for accommodations and services
described in Subsection 
59-12-103
(1)(i) to the extent the amount is exempt under Section
59-12-104.2
;
(46) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
sports event registration certificate in accordance with Section 
41-3-306
 for the event period
specified on the temporary sports event registration certificate;
(47) (a) sales or uses of electricity, if the sales or uses are made under a tariff adopted
by the Public Service Commission of Utah only for purchase of electricity produced from a
new alternative energy source, as designated in the tariff by the Public Service Commission of
Utah; and
(b) the exemption under Subsection (47)(a) applies to the portion of the tariff rate a
customer pays under the tariff described in Subsection (47)(a) that exceeds the tariff rate under
the tariff described in Subsection (47)(a) that the customer would have paid absent the tariff;
(48) sales or rentals of mobility enhancing equipment if a person presents a
prescription for the mobility enhancing equipment;
(49) sales of water in a:
(a) pipe;
(b) conduit;
(c) ditch; or
(d) reservoir;
(50) sales of currency or coins that constitute legal tender of a state, the United States,
or a foreign nation;
(51) (a) sales of an item described in Subsection (51)(b) if the item:
(i) does not constitute legal tender of a state, the United States, or a foreign nation; and
(ii) has a gold, silver, or platinum content of 50% or more; and
(b) Subsection (51)(a) applies to a gold, silver, or platinum:
(i) ingot;
(ii) bar;
(iii) medallion; or
(iv) decorative coin;
(52) amounts paid on a sale-leaseback transaction;
(53) sales of a prosthetic device:
(a) for use on or in a human; and
(b) (i) for which a prescription is required; or
(ii) if the prosthetic device is purchased by a hospital or other medical facility;
(54) (a) except as provided in Subsection (54)(b), purchases, leases, or rentals of
machinery or equipment by an establishment described in Subsection (54)(c) if the machinery
or equipment is primarily used in the production or postproduction of the following media for
commercial distribution:
(i) a motion picture;
(ii) a television program;
(iii) a movie made for television;
(iv) a music video;
(v) a commercial;
(vi) a documentary; or
(vii) a medium similar to Subsections (54)(a)(i) through (vi) as determined by the
commission by administrative rule made in accordance with Subsection (54)(d); or
(b) purchases, leases, or rentals of machinery or equipment by an establishment
described in Subsection (54)(c) that is used for the production or postproduction of the
following are subject to the taxes imposed by this chapter:
(i) a live musical performance;
(ii) a live news program; or
(iii) a live sporting event;
(c) the following establishments listed in the 1997 North American Industry
Classification System of the federal Executive Office of the President, Office of Management
and Budget, apply to Subsections (54)(a) and (b):
(i) NAICS Code 512110; or
(ii) NAICS Code 51219; and
(d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may by rule:
(i) prescribe what constitutes a medium similar to Subsections (54)(a)(i) through (vi);
or
(ii) define:
(A) "commercial distribution";
(B) "live musical performance";
(C) "live news program"; or
(D) "live sporting event";
(55) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
on or before June 30, 2027, of tangible personal property that:
(i) is leased or purchased for or by a facility that:
(A) is an alternative energy electricity production facility;
(B) is located in the state; and
(C) (I) becomes operational on or after July 1, 2004; or
(II) has its generation capacity increased by one or more megawatts on or after July 1,
2004, as a result of the use of the tangible personal property;
(ii) has an economic life of five or more years; and
(iii) is used to make the facility or the increase in capacity of the facility described in
Subsection (55)(a)(i) operational up to the point of interconnection with an existing
transmission grid including:
(A) a wind turbine;
(B) generating equipment;
(C) a control and monitoring system;
(D) a power line;
(E) substation equipment;
(F) lighting;
(G) fencing;
(H) pipes; or
(I) other equipment used for locating a power line or pole; and
(b) this Subsection (55) does not apply to:
(i) tangible personal property used in construction of:
(A) a new alternative energy electricity production facility; or
(B) the increase in the capacity of an alternative energy electricity production facility;
(ii) contracted services required for construction and routine maintenance activities;
and
(iii) unless the tangible personal property is used or acquired for an increase in capacity
of the facility described in Subsection (55)(a)(i)(C)(II), tangible personal property used or
acquired after:
(A) the alternative energy electricity production facility described in Subsection
(55)(a)(i) is operational as described in Subsection (55)(a)(iii); or
(B) the increased capacity described in Subsection (55)(a)(i) is operational as described
in Subsection (55)(a)(iii);
(56) (a) leases of seven or more years or purchases made on or after July 1, 2004, but
on or before June 30, 2027, of tangible personal property that:
(i) is leased or purchased for or by a facility that:
(A) is a waste energy production facility;
(B) is located in the state; and
(C) (I) becomes operational on or after July 1, 2004; or
(II) has its generation capacity increased by one or more megawatts on or after July 1,
2004, as a result of the use of the tangible personal property;
(ii) has an economic life of five or more years; and
(iii) is used to make the facility or the increase in capacity of the facility described in
Subsection (56)(a)(i) operational up to the point of interconnection with an existing
transmission grid including:
(A) generating equipment;
(B) a control and monitoring system;
(C) a power line;
(D) substation equipment;
(E) lighting;
(F) fencing;
(G) pipes; or
(H) other equipment used for locating a power line or pole; and
(b) this Subsection (56) does not apply to:
(i) tangible personal property used in construction of:
(A) a new waste energy facility; or
(B) the increase in the capacity of a waste energy facility;
(ii) contracted services required for construction and routine maintenance activities;
and
(iii) unless the tangible personal property is used or acquired for an increase in capacity
described in Subsection (56)(a)(i)(C)(II), tangible personal property used or acquired after:
(A) the waste energy facility described in Subsection (56)(a)(i) is operational as
described in Subsection (56)(a)(iii); or
(B) the increased capacity described in Subsection (56)(a)(i) is operational as described
in Subsection (56)(a)(iii);
(57) (a) leases of five or more years or purchases made on or after July 1, 2004, but on
or before June 30, 2027, of tangible personal property that:
(i) is leased or purchased for or by a facility that:
(A) is located in the state;
(B) produces fuel from alternative energy, including:
(I) methanol; or
(II) ethanol; and
(C) (I) becomes operational on or after July 1, 2004; or
(II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004, as
a result of the installation of the tangible personal property;
(ii) has an economic life of five or more years; and
(iii) is installed on the facility described in Subsection (57)(a)(i);
(b) this Subsection (57) does not apply to:
(i) tangible personal property used in construction of:
(A) a new facility described in Subsection (57)(a)(i); or
(B) the increase in capacity of the facility described in Subsection (57)(a)(i); or
(ii) contracted services required for construction and routine maintenance activities;
and
(iii) unless the tangible personal property is used or acquired for an increase in capacity
described in Subsection (57)(a)(i)(C)(II), tangible personal property used or acquired after:
(A) the facility described in Subsection (57)(a)(i) is operational; or
(B) the increased capacity described in Subsection (57)(a)(i) is operational;
(58) (a) subject to Subsection (58)(b) or (c), sales of tangible personal property or a
product transferred electronically to a person within this state if that tangible personal property
or product transferred electronically is subsequently shipped outside the state and incorporated
pursuant to contract into and becomes a part of real property located outside of this state;
(b) the exemption under Subsection (58)(a) is not allowed to the extent that the other
state or political entity to which the tangible personal property is shipped imposes a sales, use,
gross receipts, or other similar transaction excise tax on the transaction against which the other
state or political entity allows a credit for sales and use taxes imposed by this chapter; and
(c) notwithstanding the time period of Subsection 
59-1-1410
(8) for filing for a refund,
a person may claim the exemption allowed by this Subsection (58) for a sale by filing for a
refund:
(i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
(ii) as if this Subsection (58) as in effect on July 1, 2008, were in effect on the day on
which the sale is made;
(iii) if the person did not claim the exemption allowed by this Subsection (58) for the
sale prior to filing for the refund;
(iv) for sales and use taxes paid under this chapter on the sale;
(v) in accordance with Section 
59-1-1410
; and
(vi) subject to any extension allowed for filing for a refund under Section 
59-1-1410
, if
the person files for the refund on or before June 30, 2011;
(59) purchases:
(a) of one or more of the following items in printed or electronic format:
(i) a list containing information that includes one or more:
(A) names; or
(B) addresses; or
(ii) a database containing information that includes one or more:
(A) names; or
(B) addresses; and
(b) used to send direct mail;
(60) redemptions or repurchases of a product by a person if that product was:
(a) delivered to a pawnbroker as part of a pawn transaction; and
(b) redeemed or repurchased within the time period established in a written agreement
between the person and the pawnbroker for redeeming or repurchasing the product;
(61) (a) purchases or leases of an item described in Subsection (61)(b) if the item:
(i) is purchased or leased by, or on behalf of, a telecommunications service provider;
and
(ii) has a useful economic life of one or more years; and
(b) the following apply to Subsection (61)(a):
(i) telecommunications enabling or facilitating equipment, machinery, or software;
(ii) telecommunications equipment, machinery, or software required for 911 service;
(iii) telecommunications maintenance or repair equipment, machinery, or software;
(iv) telecommunications switching or routing equipment, machinery, or software; or
(v) telecommunications transmission equipment, machinery, or software;
(62) (a) beginning on July 1, 2006, and ending on June 30, 2027, purchases of tangible
personal property or a product transferred electronically that are used in the research and
development of alternative energy technology; and
(b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may, for purposes of Subsection (62)(a), make rules defining what constitutes
purchases of tangible personal property or a product transferred electronically that are used in
the research and development of alternative energy technology;
(63) (a) purchases of tangible personal property or a product transferred electronically
if:
(i) the tangible personal property or product transferred electronically is:
(A) purchased outside of this state;
(B) brought into this state at any time after the purchase described in Subsection
(63)(a)(i)(A); and
(C) used in conducting business in this state; and
(ii) for:
(A) tangible personal property or a product transferred electronically other than the
tangible personal property described in Subsection (63)(a)(ii)(B), the first use of the property
for a purpose for which the property is designed occurs outside of this state; or
(B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
outside of this state;
(b) the exemption provided for in Subsection (63)(a) does not apply to:
(i) a lease or rental of tangible personal property or a product transferred electronically;
or
(ii) a sale of a vehicle exempt under Subsection (33); and
(c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
purposes of Subsection (63)(a), the commission may by rule define what constitutes the
following:
(i) conducting business in this state if that phrase has the same meaning in this
Subsection (63) as in Subsection (24);
(ii) the first use of tangible personal property or a product transferred electronically if
that phrase has the same meaning in this Subsection (63) as in Subsection (24); or
(iii) a purpose for which tangible personal property or a product transferred
electronically is designed if that phrase has the same meaning in this Subsection (63) as in
Subsection (24);
(64) sales of disposable home medical equipment or supplies if:
(a) a person presents a prescription for the disposable home medical equipment or
supplies;
(b) the disposable home medical equipment or supplies are used exclusively by the
person to whom the prescription described in Subsection (64)(a) is issued; and
(c) the disposable home medical equipment and supplies are listed as eligible for
payment under:
(i) Title XVIII, federal Social Security Act; or
(ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
(65) sales:
(a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
District Act; or
(b) of tangible personal property to a subcontractor of a public transit district, if the
tangible personal property is:
(i) clearly identified; and
(ii) installed or converted to real property owned by the public transit district;
(66) sales of construction materials:
(a) purchased on or after July 1, 2010;
(b) purchased by, on behalf of, or for the benefit of an international airport:
(i) located within a county of the first class; and
(ii) that has a United States customs office on its premises; and
(c) if the construction materials are:
(i) clearly identified;
(ii) segregated; and
(iii) installed or converted to real property:
(A) owned or operated by the international airport described in Subsection (66)(b); and
(B) located at the international airport described in Subsection (66)(b);
(67) sales of construction materials:
(a) purchased on or after July 1, 2008;
(b) purchased by, on behalf of, or for the benefit of a new airport:
(i) located within a county of the second class; and
(ii) that is owned or operated by a city in which an airline as defined in Section
59-2-102
 is headquartered; and
(c) if the construction materials are:
(i) clearly identified;
(ii) segregated; and
(iii) installed or converted to real property:
(A) owned or operated by the new airport described in Subsection (67)(b);
(B) located at the new airport described in Subsection (67)(b); and
(C) as part of the construction of the new airport described in Subsection (67)(b);
(68) sales of fuel to a common carrier that is a railroad for use in a locomotive engine;
(69) purchases and sales described in Section 
63H-4-111
;
(70) (a) sales of tangible personal property to an aircraft maintenance, repair, and
overhaul provider for use in the maintenance, repair, overhaul, or refurbishment in this state of
a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
lists a state or country other than this state as the location of registry of the fixed wing turbine
powered aircraft; or
(b) sales of tangible personal property by an aircraft maintenance, repair, and overhaul
provider in connection with the maintenance, repair, overhaul, or refurbishment in this state of
a fixed wing turbine powered aircraft if that fixed wing turbine powered aircraft's registration
lists a state or country other than this state as the location of registry of the fixed wing turbine
powered aircraft;
(71) subject to Section 
59-12-104.4
, sales of a textbook for a higher education course:
(a) to a person admitted to an institution of higher education; and
(b) by a seller, other than a bookstore owned by an institution of higher education, if
51% or more of that seller's sales revenue for the previous calendar quarter are sales of a
textbook for a higher education course;
(72) a license fee or tax a municipality imposes in accordance with Subsection
10-1-203
(5) on a purchaser from a business for which the municipality provides an enhanced
level of municipal services;
(73) amounts paid or charged for construction materials used in the construction of a
new or expanding life science research and development facility in the state, if the construction
materials are:
(a) clearly identified;
(b) segregated; and
(c) installed or converted to real property;
(74) amounts paid or charged for:
(a) a purchase or lease of machinery and equipment that:
(i) are used in performing qualified research:
(A) as defined in Section 41(d), Internal Revenue Code; and
(B) in the state; and
(ii) have an economic life of three or more years; and
(b) normal operating repair or replacement parts:
(i) for the machinery and equipment described in Subsection (74)(a); and
(ii) that have an economic life of three or more years;
(75) a sale or lease of tangible personal property used in the preparation of prepared
food if:
(a) for a sale:
(i) the ownership of the seller and the ownership of the purchaser are identical; and
(ii) the seller or the purchaser paid a tax under this chapter on the purchase of that
tangible personal property prior to making the sale; or
(b) for a lease:
(i) the ownership of the lessor and the ownership of the lessee are identical; and
(ii) the lessor or the lessee paid a tax under this chapter on the purchase of that tangible
personal property prior to making the lease;
(76) (a) purchases of machinery or equipment if:
(i) the purchaser is an establishment described in NAICS Subsector 713, Amusement,
Gambling, and Recreation Industries, of the 2012 North American Industry Classification
System of the federal Executive Office of the President, Office of Management and Budget;
(ii) the machinery or equipment:
(A) has an economic life of three or more years; and
(B) is used by one or more persons who pay admission or user fees described in
Subsection 
59-12-103
(1)(f) to the purchaser of the machinery and equipment; and
(iii) 51% or more of the purchaser's sales revenue for the previous calendar quarter is:
(A) amounts paid or charged as admission or user fees described in Subsection
59-12-103
(1)(f); and
(B) subject to taxation under this chapter; 
and
(b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules for verifying that 51% of a purchaser's sales revenue for the
previous calendar quarter is:
(i) amounts paid or charged as admission or user fees described in Subsection
59-12-103
(1)(f); and
(ii) subject to taxation under this chapter; [
and
]
[
(c) on or before the November 2018 interim meeting, and every five years after the
November 2018 interim meeting, the commission shall review the exemption provided in this
Subsection (76) and report to the Revenue and Taxation Interim Committee on:
]
[
(i) the revenue lost to the state and local taxing jurisdictions as a result of the
exemption;
]
[
(ii) the purpose and effectiveness of the exemption; and
]
[
(iii) whether the exemption benefits the state;
]
(77) purchases of a short-term lodging consumable by a business that provides
accommodations and services described in Subsection 
59-12-103
(1)(i);
(78) amounts paid or charged to access a database:
(a) if the primary purpose for accessing the database is to view or retrieve information
from the database; and
(b) not including amounts paid or charged for a:
(i) digital audiowork;
(ii) digital audio-visual work; or
(iii) digital book;
(79) amounts paid or charged for a purchase or lease made by an electronic financial
payment service, of:
(a) machinery and equipment that:
(i) are used in the operation of the electronic financial payment service; and
(ii) have an economic life of three or more years; and
(b) normal operating repair or replacement parts that:
(i) are used in the operation of the electronic financial payment service; and
(ii) have an economic life of three or more years;
(80) beginning on April 1, 2013, sales of a fuel cell as defined in Section 
54-15-102
;
(81) amounts paid or charged for a purchase or lease of tangible personal property or a
product transferred electronically if the tangible personal property or product transferred
electronically:
(a) is stored, used, or consumed in the state; and
(b) is temporarily brought into the state from another state:
(i) during a disaster period as defined in Section 
53-2a-1202
;
(ii) by an out-of-state business as defined in Section 
53-2a-1202
;
(iii) for a declared state disaster or emergency as defined in Section 
53-2a-1202
; and
(iv) for disaster- or emergency-related work as defined in Section 
53-2a-1202
;
(82) sales of goods and services at a morale, welfare, and recreation facility, as defined
in Section 
39-9-102
, made pursuant to Title 39, Chapter 9, State Morale, Welfare, and
Recreation Program;
(83) amounts paid or charged for a purchase or lease of molten magnesium; and
(84) (a) except as provided in Subsection (84)(b), amounts paid or charged for a
purchase or lease made by a drilling equipment manufacturer of machinery, equipment,
materials, or normal operating repair or replacement parts:
(i) that are used or consumed exclusively in the drilling equipment manufacturer's
manufacturing process; and
(ii) except for office:
(A) equipment; or
(B) supplies; and
(b) beginning on July 1, 2015, and ending on June 30, 2017, a person may claim an
exemption described in Subsection (84)(a) only by filing for a refund:
(i) of 50% of the tax paid on the amounts paid or charged; and
(ii) in accordance with Section 
59-1-1410
.
Section 28. Section 
59-12-104.2
 is amended to read:
59-12-104.2.
Exemption for accommodations and services taxed by the Navajo
Nation.
(1) As used in this section "tribal taxing area" means the geographical area that:
(a) is subject to the taxing authority of the Navajo Nation; and
(b) consists of:
(i) notwithstanding the issuance of a patent, all land:
(A) within the limits of an Indian reservation under the jurisdiction of the federal
government; and
(B) including any rights-of-way running through the reservation; and
(ii) all Indian allotments the Indian titles to which have not been extinguished,
including any rights-of-way running through an Indian allotment.
(2) (a) Beginning July 1, 2001, amounts paid by or charged to a purchaser for
accommodations and services described in Subsection 
59-12-103
(1)(i) are exempt from the tax
imposed by Subsection 
59-12-103
(2)(a)(i)(A) or (2)(d)(i)(A)(I) to the extent permitted under
Subsection (2)(b) if:
(i) the accommodations and services described in Subsection 
59-12-103
(1)(i) are
provided within:
(A) the state; and
(B) a tribal taxing area;
(ii) the Navajo Nation imposes and collects a tax on the amounts paid by or charged to
the purchaser for the accommodations and services described in Subsection 
59-12-103
(1)(i);
(iii) the Navajo Nation imposes the tax described in Subsection (2)(a)(ii) without
regard to whether or not the purchaser that pays or is charged for the accommodations and
services is an enrolled member of the Navajo Nation; and
(iv) the requirements of Subsection (4) are met.
(b) If but for Subsection (2)(a) the amounts paid by or charged to a purchaser for
accommodations and services described in Subsection (2)(a) are subject to a tax imposed by
Subsection 
59-12-103
(2)(a)(i)(A) or (2)(d)(i)(A)(I):
(i) the seller shall collect and pay to the state the difference described in Subsection (3)
if that difference is greater than $0; and
(ii) a person may not require the state to provide a refund, a credit, or similar tax relief
if the difference described in Subsection (3) is equal to or less than $0.
(3) The difference described in Subsection (2)(b) is equal to the difference between:
(a) the amount of tax imposed by Subsection 
59-12-103
(2)(a)(i)(A) or (2)(d)(i)(A)(I)
on the amounts paid by or charged to a purchaser for accommodations and services described
in Subsection 
59-12-103
(1)(i); less
(b) the tax imposed and collected by the Navajo Nation on the amounts paid by or
charged to a purchaser for the accommodations and services described in Subsection
59-12-103
(1)(i).
(4) (a) If, on or after July 1, 2001, the Navajo Nation changes the tax rate of a tax
imposed on amounts paid by or charged to a purchaser for accommodations and services
described in Subsection 
59-12-103
(1)(i), any change in the amount of the exemption under
Subsection (2) as a result of the change in the tax rate is not effective until the first day of the
calendar quarter after a 90-day period beginning on the date the commission receives notice
meeting the requirements of Subsection (4)(b) from the Navajo Nation.
(b) The notice described in Subsection (4)(a) shall state:
(i) that the Navajo Nation has changed or will change the tax rate of a tax imposed on
amounts paid by or charged to a purchaser for accommodations and services described in
Subsection 
59-12-103
(1)(i);
(ii) the effective date of the rate change on the tax described in Subsection (4)(b)(i);
and
(iii) the new rate of the tax described in Subsection (4)(b)(i).
[
(5) Beginning with the 2006 interim, the Revenue and Taxation Interim Committee:
]
[
(a) shall review the exemption provided for in this section one or more times every
five years;
]
[
(b) shall determine on or before the November interim meeting of the year in which
the Revenue and Taxation Interim Committee reviews the exemption provided for in this
section whether the exemption should be:
]
[
(i) continued;
]
[
(ii) modified; or
]
[
(iii) repealed; and
]
[
(c) may review any other issue related to the exemption provided for in this section as
determined by the Revenue and Taxation Interim Committee.
]
Section 29. Section 
59-12-104.5
 is amended to read:
59-12-104.5.
Revenue and Taxation Interim Committee review of sales and use
taxes.
The Revenue and Taxation Interim Committee shall:
(1) review Subsection 
59-12-104
(28) before October 1 of the year after the year in
which Congress permits a state to participate in the special supplemental nutrition program
under 42 U.S.C. Sec. 1786 even if state or local sales taxes are collected within the state on
purchases of food under that program; 
and
(2) review Subsection 
59-12-104
(21) before October 1 of the year after the year in
which Congress permits a state to participate in the SNAP as defined in Section 
35A-1-102
,
even if state or local sales taxes are collected within the state on purchases of food under that
program[
; and
]
.
[
(3) review Subsection 
59-12-104
(62) before the October 2011 interim meeting.
]
Section 30. Section 
59-23-4
 is amended to read:
59-23-4.
Brine shrimp royalty -- Royalty rate -- Commission to prepare billing
statement -- Deposit of revenue.
(1) A person shall pay for each tax year a brine shrimp royalty of 3.75 cents multiplied
by the total number of pounds of unprocessed brine shrimp eggs that the person harvests within
the state during the tax year.
(2) (a) A person that harvests unprocessed brine shrimp eggs shall report to the
Department of Natural Resources the total number of pounds of unprocessed brine shrimp eggs
harvested by that person for that tax year on or before the February 15 immediately following
the last day of that tax year.
(b) The Department of Natural Resources shall provide the following information to
the commission on or before the March 1 immediately following the last day of a tax year:
(i) the total number of pounds of unprocessed brine shrimp eggs harvested for that tax
year; and
(ii) for each person that harvested unprocessed brine shrimp eggs for that tax year:
(A) the total number of pounds of unprocessed brine shrimp eggs harvested by that
person for that tax year; and
(B) a current billing address for that person; and
(iii) any additional information required by the commission.
(c) (i) The commission shall prepare and mail a billing statement to each person that
harvested unprocessed brine shrimp eggs in a tax year by the March 30 immediately following
the last day of a tax year.
(ii) The billing statement under Subsection (2)(c)(i) shall specify:
(A) the total number of pounds of unprocessed brine shrimp eggs harvested by that
person for that tax year;
(B) the brine shrimp royalty that the person owes; and
(C) the date that the brine shrimp royalty payment is due as provided in Section
59-23-5
.
(d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules prescribing the information required under Subsection (2)(b)(iii).
(3) Revenue generated by the brine shrimp royalty shall be deposited in the Species
Protection Account created in Section 
79-2-303
.
[
(4) Beginning with the 2004 interim, the Revenue and Taxation Interim Committee:
]
[
(a) shall review the brine shrimp royalty imposed under this section at least every five
years;
]
[
(b) shall determine on or before the November interim meeting of the year in which
the Revenue and Taxation Interim Committee reviews the brine shrimp royalty imposed under
this section whether the brine shrimp royalty should be continued, modified, or repealed; and
]
[
(c) may review any other issue related to the brine shrimp royalty imposed under this
part.
]
Section 31. Section 
63M-4-505
 is amended to read:
63M-4-505.
Report to the Legislature.
The office shall 
annually provide an electronic
 report [
annually
] to the Public Utilities
and Technology Interim Committee and the Revenue and Taxation Interim Committee
describing:
(1) its success in attracting alternative energy projects to the state and the resulting
increase in new state revenues under this part;
(2) the amount of tax credits the office has granted or will grant and the time period
during which the tax credits have been or will be granted; and
(3) the economic impact on the state by comparing new state revenues to tax credits
that have been or will be granted under this part.
Section 32. Section 
63N-2-810
 is amended to read:
63N-2-810.
Reports on tax credit certificates -- Study by legislative committees.
(1) The office shall include the following information in the annual written report
described in Section 
63N-1-301
:
(a) the total amount listed on tax credit certificates the office issues under this part;
(b) the criteria that the office uses in prioritizing the issuance of tax credits amongst tax
credit applicants under this part; and
(c) the economic impact on the state related to providing tax credits under this part.
(2) (a) On or before November 1, 2016, and every five years after November 1, 2016,
the Revenue and Taxation Interim Committee shall:
(i) study the tax credits allowed under Sections 
59-7-614.6
, 
59-10-1025
, and
59-10-1109
; and
(ii) make recommendations concerning whether the tax credits should be continued,
modified, or repealed.
(b) The study under Subsection (2)(a) shall include an evaluation of:
(i) the cost of the tax credits under Sections 
59-7-614.6
, 
59-10-1025
, and 
59-10-1109
;
(ii) the purposes and effectiveness of the tax credits; and
(iii) the extent to which the state benefits from the tax credits.
(c) For purposes of the study required by this Subsection (2), the office shall provide
the following information to the Revenue and Taxation Interim Committee by electronic
means:
(i) the amount of tax credits that the office grants to each eligible business entity for
each taxable year;
(ii) the amount of eligible new state tax revenues generated by each eligible product or
project;
(iii) estimates for each of the next five calendar years of the following:
(A) the amount of tax credits that the office will grant;
(B) the amount of eligible new state tax revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
(iv) the information contained in the office's latest report to the Legislature under
Section 
63N-2-705
; and
(v) any other information that the Revenue and Taxation Interim Committee requests.
Section 33. 
Repealer.
This bill repeals:
Section 
59-26-110
,
Revenue and Taxation Interim Committee study.