Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 36 (2021GS)

Sponsor

Sen. Bramble, C.

Final action

Governor Signed 2/25/2021

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• allows the State Tax Commission to waive the bond requirement for a person whose withholding tax license or sales and use tax license was revoked for a delinquency, if the person is in compliance with a payment agreement approved by the commission; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

TAX COMMISSION BOND REQUIREMENT AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Curtis S. Bramble
House Sponsor: 
Steve Eliason
LONG TITLE
General Description:
This bill modifies provisions related to bond requirements for certain tax licensees.
Highlighted Provisions:
This bill:
▸ allows the State Tax Commission to waive the bond requirement for a person whose
withholding tax license or sales and use tax license was revoked for a delinquency,
if the person is in compliance with a payment agreement approved by the
commission; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
59-10-405.5
, as last amended by Laws of Utah 2008, Chapter 382
59-12-106
, as last amended by Laws of Utah 2020, Chapter 284
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
59-10-405.5
 is amended to read:
59-10-405.5.
Definitions -- Withholding tax license requirements -- Penalty --
Application process and requirements -- Fee not required -- Bonds.
(1) As used in this section:
(a) "applicant" means a person that:
(i) is required by this section to obtain a license; and
(ii) submits an application:
(A) to the commission; and
(B) for a license under this section;
(b) "application" means an application for a license under this section;
(c) "fiduciary of the applicant" means a person that:
(i) is required to collect, truthfully account for, and pay over an amount under this part
for an applicant; and
(ii) (A) is a corporate officer of the applicant described in Subsection (1)(c)(i);
(B) is a director of the applicant described in Subsection (1)(c)(i);
(C) is an employee of the applicant described in Subsection (1)(c)(i);
(D) is a partner of the applicant described in Subsection (1)(c)(i);
(E) is a trustee of the applicant described in Subsection (1)(c)(i); or
(F) has a relationship to the applicant described in Subsection (1)(c)(i) that is similar to
a relationship described in Subsections (1)(c)(ii)(A) through (E) as determined by the
commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act;
(d) "fiduciary of the licensee" means a person that:
(i) is required to collect, truthfully account for, and pay over an amount under this part
for a licensee; and
(ii) (A) is a corporate officer of the licensee described in Subsection (1)(d)(i);
(B) is a director of the licensee described in Subsection (1)(d)(i);
(C) is an employee of the licensee described in Subsection (1)(d)(i);
(D) is a partner of the licensee described in Subsection (1)(d)(i);
(E) is a trustee of the licensee described in Subsection (1)(d)(i); or
(F) has a relationship to the licensee described in Subsection (1)(d)(i) that is similar to
a relationship described in Subsections (1)(d)(ii)(A) through (E) as determined by the
commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act;
(e) "license" means a license under this section; and
(f) "licensee" means a person that is licensed under this section by the commission.
(2) The following persons are guilty of a criminal violation as provided in Section
59-1-401
:
(a) a person that:
(i) is required to withhold, report, or remit any amounts under this part; and
(ii) engages in business within the state before obtaining a license under this section; or
(b) a person that:
(i) pays wages under this part; and
(ii) engages in business within the state before obtaining a license under this section.
(3) The license described in Subsection (2):
(a) shall be granted and issued:
(i) by the commission in accordance with this section;
(ii) without a license fee; and
(iii) if:
(A) an applicant:
(I) states the applicant's name and address in the application; and
(II) provides other information in the application that the commission may require; and
(B) the person meets the requirements of this section to be granted a license as
determined by the commission;
(b) may not be assigned to another person; and
(c) is valid:
(i) only for the person named on the license; and
(ii) until:
(A) the person described in Subsection (3)(c)(i):
(I) ceases to do business; or
(II) changes that person's business address; or
(B) the commission revokes the license.
(4) The commission shall review an application and determine whether:
(a) the applicant meets the requirements of this section to be issued a license; and
(b) a bond is required to be posted with the commission in accordance with
Subsections (5) and (6) before the applicant may be issued a license.
(5) (a) [
An
] 
Except as provided in Subsection (5)(c), an
 applicant shall post a bond
with the commission before the commission may issue the applicant a license if:
(i) a license under this section was revoked for a delinquency under this part for:
(A) the applicant;
(B) a fiduciary of the applicant; or
(C) a person for which the applicant or the fiduciary of the applicant is required to
collect, truthfully account for, and pay over an amount under this part; or
(ii) there is a delinquency in withholding, reporting, or remitting any amount under this
part for:
(A) an applicant;
(B) a fiduciary of the applicant; or
(C) a person for which the applicant or the fiduciary of the applicant is required to
collect, truthfully account for, and pay over an amount under this part.
(b) If the commission determines it is necessary to ensure compliance with this part,
the commission may require a licensee to:
(i) for a licensee that has not posted a bond under this section with the commission,
post a bond with the commission in accordance with Subsection (6); or
(ii) for a licensee that has posted a bond under this section with the commission,
increase the amount of the bond posted with the commission.
(c) The commission may waive the bond requirement described in Subsection (5)(a), if
the applicant is in compliance with a payment agreement that:
(i) relates to the delinquency; and
(ii) is approved by the commission.
(6) (a) A bond required by Subsection (5) shall be:
(i) executed by:
(A) for an applicant, the applicant as principal, with a corporate surety; or
(B) for a licensee, the licensee as principal, with a corporate surety; and
(ii) payable to the commission conditioned upon the faithful performance of all of the
requirements of this part including:
(A) the withholding or remitting of any amount under this part;
(B) the payment of any:
(I) penalty as provided in Section 
59-1-401
; or
(II) interest as provided in Section 
59-1-402
; or
(C) any other obligation of the:
(I) applicant under this part; or
(II) licensee under this part.
(b) Except as provided in Subsection (6)(d), the commission shall calculate the amount
of a bond required by Subsection (5) on the basis of:
(i) commission estimates of:
(A) for an applicant, any amounts the applicant withholds, reports, or remits under this
part; or
(B) for a licensee, any amounts the licensee withholds, reports, or remits under this
part; and
(ii) any amount of a delinquency described in Subsection (6)(c).
(c) Except as provided in Subsection (6)(d), for purposes of Subsection (6)(b)(ii):
(i) for an applicant, the amount of the delinquency is the sum of:
(A) the amount of any delinquency that served as a basis for revoking the license under
this section of:
(I) the applicant;
(II) a fiduciary of the applicant; or
(III) a person for which the applicant or the fiduciary of the applicant is required to
collect, truthfully account for, and pay over an amount under this part; or
(B) the amount that any of the following owe under this part:
(I) the applicant;
(II) a fiduciary of the applicant; and
(III) a person for which the applicant or the fiduciary of the applicant is required to
collect, truthfully account for, and pay over an amount under this part; or
(ii) for a licensee, the amount of the delinquency is the sum of:
(A) the amount of any delinquency that served as a basis for revoking the license under
this section of:
(I) the licensee;
(II) a fiduciary of the licensee; or
(III) a person for which the licensee or the fiduciary of the licensee is required to
collect, truthfully account for, and pay over an amount under this part; or
(B) the amount that any of the following owe under this part:
(I) the licensee;
(II) a fiduciary of the licensee; and
(III) a person for which the licensee or the fiduciary of the licensee is required to
collect, truthfully account for, and pay over an amount under this part.
(d) Notwithstanding Subsection (6)(b) or (c), a bond required by Subsection (5) may
not:
(i) be less than $25,000; or
(ii) exceed $500,000.
(7) (a) The commission shall revoke a license under this section if:
(i) a licensee violates any provision of this part; and
(ii) before the commission revokes the license the commission provides the licensee:
(A) reasonable notice; and
(B) a hearing.
(b) If the commission revokes a licensee's license in accordance with Subsection (7)(a),
the commission may not issue another license to that licensee until that licensee complies with
the requirements of this part, including:
(i) paying any:
(A) amounts due under this part;
(B) penalty as provided in Section 
59-1-401
; or
(C) interest as provided in Section 
59-1-402
; and
(ii) posting a bond in accordance with Subsections (5) and (6).
Section 2. Section 
59-12-106
 is amended to read:
59-12-106.
Definitions -- Sales and use tax license requirements -- Penalty --
Application process and requirements -- No fee -- Bonds -- Presumption of taxability --
Exemption certificates -- Exemption certificate license number to accompany contract
bids.
(1) As used in this section:
(a) "Applicant" means a person that:
(i) is required by this section to obtain a license; and
(ii) submits an application:
(A) to the commission; and
(B) for a license under this section.
(b) "Application" means an application for a license under this section.
(c) "Fiduciary of the applicant" means a person that:
(i) is required to collect, truthfully account for, and pay over a tax under this chapter
for an applicant; and
(ii) (A) is a corporate officer of the applicant described in Subsection (1)(c)(i);
(B) is a director of the applicant described in Subsection (1)(c)(i);
(C) is an employee of the applicant described in Subsection (1)(c)(i);
(D) is a partner of the applicant described in Subsection (1)(c)(i);
(E) is a trustee of the applicant described in Subsection (1)(c)(i); or
(F) has a relationship to the applicant described in Subsection (1)(c)(i) that is similar to
a relationship described in Subsections (1)(c)(ii)(A) through (E) as determined by the
commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act.
(d) "Fiduciary of the licensee" means a person that:
(i) is required to collect, truthfully account for, and pay over a tax under this chapter
for a licensee; and
(ii) (A) is a corporate officer of the licensee described in Subsection (1)(d)(i);
(B) is a director of the licensee described in Subsection (1)(d)(i);
(C) is an employee of the licensee described in Subsection (1)(d)(i);
(D) is a partner of the licensee described in Subsection (1)(d)(i);
(E) is a trustee of the licensee described in Subsection (1)(d)(i); or
(F) has a relationship to the licensee described in Subsection (1)(d)(i) that is similar to
a relationship described in Subsections (1)(d)(ii)(A) through (E) as determined by the
commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act.
(e) "License" means a license under this section.
(f) "Licensee" means a person that is licensed under this section by the commission.
(g) "Special event" means an event that lasts six months or less where taxable sales
occur.
(2) (a) It is unlawful for any person required to collect a tax under this chapter to
engage in business within the state without first having obtained a license to do so.
(b) The license described in Subsection (2)(a):
(i) shall be granted and issued by the commission;
(ii) is not assignable;
(iii) is valid only for the person in whose name the license is issued;
(iv) is valid until:
(A) the person described in Subsection (2)(b)(iii):
(I) ceases to do business; or
(II) changes that person's business address; or
(B) the license is revoked by the commission; and
(v) subject to Subsection (2)(d), shall be granted by the commission only upon an
application that:
(A) states the name and address of the applicant; and
(B) provides other information the commission may require.
(c) At the time an applicant makes an application under Subsection (2)(b)(v), the
commission shall notify the applicant of the responsibilities and liability of a business owner
successor under Section 
59-12-112
.
(d) The commission shall review an application and determine whether the applicant:
(i) meets the requirements of this section to be issued a license; and
(ii) is required to post a bond with the commission in accordance with Subsections
(2)(e) and (f) before the applicant may be issued a license.
(e) (i) [
An
] 
Except as provided in Subsection (2)(e)(iii), an
 applicant shall post a bond
with the commission before the commission may issue the applicant a license if:
(A) a license under this section was revoked for a delinquency under this chapter for:
(I) the applicant;
(II) a fiduciary of the applicant; or
(III) a person for which the applicant or the fiduciary of the applicant is required to
collect, truthfully account for, and pay over a tax under this chapter; or
(B) there is a delinquency in paying a tax under this chapter for:
(I) the applicant;
(II) a fiduciary of the applicant; or
(III) a person for which the applicant or the fiduciary of the applicant is required to
collect, truthfully account for, and pay over a tax under this chapter.
(ii) If the commission determines it is necessary to ensure compliance with this
chapter, the commission may require a licensee to:
(A) for a licensee that has not posted a bond under this section with the commission,
post a bond with the commission in accordance with Subsection (2)(f); or
(B) for a licensee that has posted a bond under this section with the commission,
increase the amount of the bond posted with the commission.
(iii) The commission may waive the bond requirement described in Subsection
(2)(e)(i), if the applicant is in compliance with a payment agreement that:
(A) relates to the delinquency; and
(B) is approved by the commission.
(f) (i) A bond required by Subsection (2)(e) shall be:
(A) executed by:
(I) for an applicant, the applicant as principal, with a corporate surety; or
(II) for a licensee, the licensee as principal, with a corporate surety; and
(B) payable to the commission conditioned upon the faithful performance of all of the
requirements of this chapter including:
(I) the payment of any tax under this chapter;
(II) the payment of any:
(Aa) penalty as provided in Section 
59-1-401
; or
(Bb) interest as provided in Section 
59-1-402
; or
(III) any other obligation of the:
(Aa) applicant under this chapter; or
(Bb) licensee under this chapter.
(ii) Except as provided in Subsection (2)(f)(iv), the commission shall calculate the
amount of a bond required by Subsection (2)(e) on the basis of:
(A) commission estimates of:
(I) an applicant's tax liability under this chapter; or
(II) a licensee's tax liability under this chapter; and
(B) any amount of a delinquency described in Subsection (2)(f)(iii).
(iii) Except as provided in Subsection (2)(f)(iv), for purposes of Subsection
(2)(f)(ii)(B):
(A) for an applicant, the amount of the delinquency is the sum of:
(I) the amount of any delinquency that served as a basis for revoking the license under
this section of:
(Aa) the applicant;
(Bb) a fiduciary of the applicant; or
(Cc) a person for which the applicant or the fiduciary of the applicant is required to
collect, truthfully account for, and pay over a tax under this chapter; or
(II) the amount of tax that any of the following owe under this chapter:
(Aa) the applicant;
(Bb) a fiduciary of the applicant; and
(Cc) a person for which the applicant or the fiduciary of the applicant is required to
collect, truthfully account for, and pay over a tax under this chapter; or
(B) for a licensee, the amount of the delinquency is the sum of:
(I) the amount of any delinquency that served as a basis for revoking the license under
this section of:
(Aa) the licensee;
(Bb) a fiduciary of the licensee; or
(Cc) a person for which the licensee or the fiduciary of the licensee is required to
collect, truthfully account for, and pay over a tax under this chapter; or
(II) the amount of tax that any of the following owe under this chapter:
(Aa) the licensee;
(Bb) a fiduciary of the licensee; and
(Cc) a person for which the licensee or the fiduciary of the licensee is required to
collect, truthfully account for, and pay over a tax under this chapter.
(iv) Notwithstanding Subsection (2)(f)(ii) or (2)(f)(iii), a bond required by Subsection
(2)(e) may not:
(A) be less than $25,000; or
(B) exceed $500,000.
(g) Subject to Subsection (2)(h), if business is transacted at two or more separate places
by one person, a separate license for each place of business is required.
(h) A license is not required for any person that is:
(i) engaged exclusively in the business of selling commodities that are exempt from
taxation under this chapter; or
(ii) exempt from collecting sales and use tax under Section 
59-12-104
 and the place of
business is a special event.
(i) (i) The commission shall, on a reasonable notice and after a hearing, revoke the
license of any licensee violating any provisions of this chapter.
(ii) A license may not be issued to a licensee described in Subsection (2)(i)(i) until the
licensee has complied with the requirements of this chapter, including:
(A) paying any:
(I) tax due under this chapter;
(II) penalty as provided in Section 
59-1-401
; or
(III) interest as provided in Section 
59-1-402
; and
(B) posting a bond in accordance with Subsections (2)(e) and (f).
(j) Any person required to collect a tax under this chapter within this state without
having secured a license to do so is guilty of a criminal violation as provided in Section
59-1-401
.
(k) A license shall be issued to the person by the commission without a license fee.
(l) (i) The commission shall include on an application for a temporary sales tax license
and special event sales tax return the following statement:
"You are not required to complete or return this form or to collect sales and use tax if
you are not regularly engaged in the business of selling the items you are offering at this event
or all of the items that you are selling at this event are exempt from sales and use tax under
Section 
59-12-104."
(ii) The notice described in Subsection (2)(l)(i) shall be in bold font no smaller than the
font of the main content and shall appear at the top of the application form.
(3) (a) For the purpose of the proper administration of this chapter and to prevent
evasion of the tax and the duty to collect the tax, it shall be presumed that tangible personal
property or any other taxable transaction under Subsection 
59-12-103
(1) sold by any person for
delivery in this state is sold for storage, use, or other consumption in this state unless the
person selling the property, item, or service has taken from the purchaser an exemption
certificate:
(i) bearing the name and address of the purchaser; and
(ii) providing that the property, item, or service was exempted under Section
59-12-104
.
(b) An exemption certificate described in Subsection (3)(a):
(i) shall contain information as prescribed by the commission; and
(ii) if a paper exemption certificate is used, shall be signed by the purchaser.
(c) (i) Subject to Subsection (3)(c)(ii), a seller or certified service provider is not liable
to collect a tax under this chapter if the seller or certified service provider obtains within 90
days after a transaction is complete:
(A) an exemption certificate containing the information required by Subsections (3)(a)
and (b); or
(B) the information required by Subsections (3)(a) and (b).
(ii) A seller or certified service provider that does not obtain the exemption certificate
or information described in Subsection (3)(c)(i) with respect to a transaction is allowed 120
days after the commission requests the seller or certified service provider to substantiate the
exemption to:
(A) establish that the transaction is not subject to taxation under this chapter by a
means other than providing an exemption certificate containing the information required by
Subsections (3)(a) and (b); or
(B) subject to Subsection (3)(c)(iii), obtain an exemption certificate containing the
information required by Subsections (3)(a) and (b), taken in good faith.
(iii) For purposes of Subsection (3)(c)(ii)(B), an exemption certificate is taken in good
faith if the exemption certificate claims an exemption that:
(A) was allowed by statute on the date of the transaction in the jurisdiction of the
location of the transaction;
(B) could be applicable to that transaction; and
(C) is reasonable for the purchaser's type of business.
(d) Except as provided in Subsection (3)(e), a seller or certified service provider that
takes an exemption certificate from a purchaser in accordance with this Subsection (3) with
respect to a transaction is not liable to collect a tax under this chapter on that transaction.
(e) Subsection (3)(d) does not apply to a seller or certified service provider if the
commission establishes through an audit that the seller or certified service provider:
(i) knew or had reason to know at the time the purchaser provided the seller or certified
service provider the information described in Subsection (3)(a) or (b) that the information
related to the exemption claimed was materially false; or
(ii) otherwise knowingly participated in activity intended to purposefully evade the tax
due on the transaction.
(f) (i) Subject to Subsection (3)(f)(ii) and except as provided in Subsection (3)(f)(iii), if
there is a recurring business relationship between a seller or certified service provider and a
purchaser, the commission may not require the seller or certified service provider to:
(A) renew an exemption certificate;
(B) update an exemption certificate; or
(C) update a data element of an exemption certificate.
(ii) For purposes of Subsection (3)(f)(i), a recurring business relationship exists if no
more than a 12-month period elapses between transactions between a seller or certified service
provider and a purchaser.
(iii) If there is a recurring business relationship between a seller or certified service
provider and a purchaser, the commission shall require an exemption certificate the seller or
certified service provider takes from the purchaser to meet the requirements of Subsections
(3)(a) and (b).
(4) A person filing a contract bid with the state or a political subdivision of the state for
the sale of tangible personal property or any other taxable transaction under Subsection
59-12-103
(1) shall include with the bid the number of the license issued to that person under
Subsection (2).