LEGISLATIVE GENERAL COUNSEL H.B. 96
6 Approved for Filing: A.V. Arthur 6
6 12-29-23 4:35 PM 6
1 CHILD CARE PROGRAM SALES TAX EXEMPTION
2 2024 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Christine F. Watkins
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill enacts a sales and use tax exemption for construction of a child care program.
10 Highlighted Provisions:
11 This bill:
12 < exempts from sales and use tax amounts paid or charged for construction materials
13 used to construct a new or expand an existing child care program; and
14 < provides a repeal date for the exemption following legislative committee review.
15 Money Appropriated in this Bill:
16 None
17 Other Special Clauses:
18 This bill provides a special effective date.
19 Utah Code Sections Affected:
20 AMENDS:
21 59-12-104, as last amended by Laws of Utah 2023, Chapters 213, 518
22 63I-1-259, as last amended by Laws of Utah 2023, Chapter 52
23
24 Be it enacted by the Legislature of the state of Utah:
25 Section 1. Section 59-12-104 is amended to read:
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26 59-12-104. Exemptions.
27 Exemptions from the taxes imposed by this chapter are as follows:
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28 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
29 under Chapter 13, Motor and Special Fuel Tax Act;
30 (2) subject to Section 59-12-104.6, sales to the state, its institutions, and its political
31 subdivisions; however, this exemption does not apply to sales of:
32 (a) construction materials except:
33 (i) construction materials purchased by or on behalf of institutions of the public
34 education system as defined in Utah Constitution, Article X, Section 2, provided the
35 construction materials are clearly identified and segregated and installed or converted to real
36 property which is owned by institutions of the public education system; and
37 (ii) construction materials purchased by the state, its institutions, or its political
38 subdivisions which are installed or converted to real property by employees of the state, its
39 institutions, or its political subdivisions; or
40 (b) tangible personal property in connection with the construction, operation,
41 maintenance, repair, or replacement of a project, as defined in Section 11-13-103, or facilities
42 providing additional project capacity, as defined in Section 11-13-103;
43 (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
44 (i) the proceeds of each sale do not exceed $1; and
45 (ii) the seller or operator of the vending machine reports an amount equal to 150% of
46 the cost of the item described in Subsection (3)(b) as goods consumed; and
47 (b) Subsection (3)(a) applies to:
48 (i) food and food ingredients; or
49 (ii) prepared food;
50 (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
51 (i) alcoholic beverages;
52 (ii) food and food ingredients; or
53 (iii) prepared food;
54 (b) sales of tangible personal property or a product transferred electronically:
55 (i) to a passenger;
56 (ii) by a commercial airline carrier; and
57 (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
58 (c) services related to Subsection (4)(a) or (b);
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59 (5) sales of parts and equipment for installation in an aircraft operated by a common
60 carrier in interstate or foreign commerce;
61 (6) sales of commercials, motion picture films, prerecorded audio program tapes or
62 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
63 exhibitor, distributor, or commercial television or radio broadcaster;
64 (7) (a) except as provided in Subsection (85) and subject to Subsection (7)(b), sales of
65 cleaning or washing of tangible personal property if the cleaning or washing of the tangible
66 personal property is not assisted cleaning or washing of tangible personal property;
67 (b) if a seller that sells at the same business location assisted cleaning or washing of
68 tangible personal property and cleaning or washing of tangible personal property that is not
69 assisted cleaning or washing of tangible personal property, the exemption described in
70 Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
71 or washing of the tangible personal property; and
72 (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
73 Utah Administrative Rulemaking Act, the commission may make rules:
74 (i) governing the circumstances under which sales are at the same business location;
75 and
76 (ii) establishing the procedures and requirements for a seller to separately account for
77 sales of assisted cleaning or washing of tangible personal property;
78 (8) sales made to or by religious or charitable institutions in the conduct of their regular
79 religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
80 fulfilled;
81 (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
82 this state if:
83 (a) the sale is not from the vehicle's lessor to the vehicle's lessee;
84 (b) the vehicle is not registered in this state; and
85 (c) (i) the vehicle is not used in this state; or
86 (ii) the vehicle is used in this state:
87 (A) if the vehicle is not used to conduct business, for a time period that does not
88 exceed the longer of:
89 (I) 30 days in any calendar year; or
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90 (II) the time period necessary to transport the vehicle to the borders of this state; or
91 (B) if the vehicle is used to conduct business, for the time period necessary to transport
92 the vehicle to the borders of this state;
93 (10) (a) amounts paid for an item described in Subsection (10)(b) if:
94 (i) the item is intended for human use; and
95 (ii) (A) a prescription was issued for the item; or
96 (B) the item was purchased by a hospital or other medical facility; and
97 (b) (i) Subsection (10)(a) applies to:
98 (A) a drug;
99 (B) a syringe; or
100 (C) a stoma supply; and
101 (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
102 commission may by rule define the terms:
103 (A) "syringe"; or
104 (B) "stoma supply";
105 (11) purchases or leases exempt under Section 19-12-201;
106 (12) (a) sales of an item described in Subsection (12)(c) served by:
107 (i) the following if the item described in Subsection (12)(c) is not available to the
108 general public:
109 (A) a church; or
110 (B) a charitable institution; or
111 (ii) an institution of higher education if:
112 (A) the item described in Subsection (12)(c) is not available to the general public; or
113 (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
114 offered by the institution of higher education; or
115 (b) sales of an item described in Subsection (12)(c) provided for a patient by:
116 (i) a medical facility; or
117 (ii) a nursing facility; and
118 (c) Subsections (12)(a) and (b) apply to:
119 (i) food and food ingredients;
120 (ii) prepared food; or
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121 (iii) alcoholic beverages;
122 (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
123 or a product transferred electronically by a person:
124 (i) regardless of the number of transactions involving the sale of that tangible personal
125 property or product transferred electronically by that person; and
126 (ii) not regularly engaged in the business of selling that type of tangible personal
127 property or product transferred electronically;
128 (b) this Subsection (13) does not apply if:
129 (i) the sale is one of a series of sales of a character to indicate that the person is
130 regularly engaged in the business of selling that type of tangible personal property or product
131 transferred electronically;
132 (ii) the person holds that person out as regularly engaged in the business of selling that
133 type of tangible personal property or product transferred electronically;
134 (iii) the person sells an item of tangible personal property or product transferred
135 electronically that the person purchased as a sale that is exempt under Subsection (25); or
136 (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
137 this state in which case the tax is based upon:
138 (A) the bill of sale, lease agreement, or other written evidence of value of the vehicle or
139 vessel being sold; or
140 (B) in the absence of a bill of sale, lease agreement, or other written evidence of value,
141 the fair market value of the vehicle or vessel being sold at the time of the sale as determined by
142 the commission; and
143 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
144 commission shall make rules establishing the circumstances under which:
145 (i) a person is regularly engaged in the business of selling a type of tangible personal
146 property or product transferred electronically;
147 (ii) a sale of tangible personal property or a product transferred electronically is one of
148 a series of sales of a character to indicate that a person is regularly engaged in the business of
149 selling that type of tangible personal property or product transferred electronically; or
150 (iii) a person holds that person out as regularly engaged in the business of selling a type
151 of tangible personal property or product transferred electronically;
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152 (14) amounts paid or charged for a purchase or lease of machinery, equipment, normal
153 operating repair or replacement parts, or materials, except for office equipment or office
154 supplies, by:
155 (a) a manufacturing facility that:
156 (i) is located in the state; and
157 (ii) uses or consumes the machinery, equipment, normal operating repair or
158 replacement parts, or materials:
159 (A) in the manufacturing process to manufacture an item sold as tangible personal
160 property, as the commission may define that phrase in accordance with Title 63G, Chapter 3,
161 Utah Administrative Rulemaking Act; or
162 (B) for a scrap recycler, to process an item sold as tangible personal property, as the
163 commission may define that phrase in accordance with Title 63G, Chapter 3, Utah
164 Administrative Rulemaking Act;
165 (b) an establishment, as the commission defines that term in accordance with Title
166 63G, Chapter 3, Utah Administrative Rulemaking Act, that:
167 (i) is described in NAICS Subsector 212, Mining (except Oil and Gas), or NAICS
168 Code 213113, Support Activities for Coal Mining, 213114, Support Activities for Metal
169 Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining, of the
170 2002 North American Industry Classification System of the federal Executive Office of the
171 President, Office of Management and Budget;
172 (ii) is located in the state; and
173 (iii) uses or consumes the machinery, equipment, normal operating repair or
174 replacement parts, or materials in:
175 (A) the production process to produce an item sold as tangible personal property, as the
176 commission may define that phrase in accordance with Title 63G, Chapter 3, Utah
177 Administrative Rulemaking Act;
178 (B) research and development, as the commission may define that phrase in accordance
179 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
180 (C) transporting, storing, or managing tailings, overburden, or similar waste materials
181 produced from mining;
182 (D) developing or maintaining a road, tunnel, excavation, or similar feature used in
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183 mining; or
184 (E) preventing, controlling, or reducing dust or other pollutants from mining; or
185 (c) an establishment, as the commission defines that term in accordance with Title
186 63G, Chapter 3, Utah Administrative Rulemaking Act, that:
187 (i) is described in NAICS Code 518112, Web Search Portals, of the 2002 North
188 American Industry Classification System of the federal Executive Office of the President,
189 Office of Management and Budget;
190 (ii) is located in the state; and
191 (iii) uses or consumes the machinery, equipment, normal operating repair or
192 replacement parts, or materials in the operation of the web search portal;
193 (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
194 (i) tooling;
195 (ii) special tooling;
196 (iii) support equipment;
197 (iv) special test equipment; or
198 (v) parts used in the repairs or renovations of tooling or equipment described in
199 Subsections (15)(a)(i) through (iv); and
200 (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
201 (i) the tooling, equipment, or parts are used or consumed exclusively in the
202 performance of any aerospace or electronics industry contract with the United States
203 government or any subcontract under that contract; and
204 (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
205 title to the tooling, equipment, or parts is vested in the United States government as evidenced
206 by:
207 (A) a government identification tag placed on the tooling, equipment, or parts; or
208 (B) listing on a government-approved property record if placing a government
209 identification tag on the tooling, equipment, or parts is impractical;
210 (16) sales of newspapers or newspaper subscriptions;
211 (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
212 product transferred electronically traded in as full or part payment of the purchase price, except
213 that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
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214 trade-ins are limited to other vehicles only, and the tax is based upon:
215 (i) the bill of sale or other written evidence of value of the vehicle being sold and the
216 vehicle being traded in; or
217 (ii) in the absence of a bill of sale or other written evidence of value, the then existing
218 fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
219 commission; and
220 (b) Subsection (17)(a) does not apply to the following items of tangible personal
221 property or products transferred electronically traded in as full or part payment of the purchase
222 price:
223 (i) money;
224 (ii) electricity;
225 (iii) water;
226 (iv) gas; or
227 (v) steam;
228 (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
229 or a product transferred electronically used or consumed primarily and directly in farming
230 operations, regardless of whether the tangible personal property or product transferred
231 electronically:
232 (A) becomes part of real estate; or
233 (B) is installed by a farmer, contractor, or subcontractor; or
234 (ii) sales of parts used in the repairs or renovations of tangible personal property or a
235 product transferred electronically if the tangible personal property or product transferred
236 electronically is exempt under Subsection (18)(a)(i); and
237 (b) amounts paid or charged for the following are subject to the taxes imposed by this
238 chapter:
239 (i) (A) subject to Subsection (18)(b)(i)(B), machinery, equipment, materials, or
240 supplies if used in a manner that is incidental to farming; and
241 (B) tangible personal property that is considered to be used in a manner that is
242 incidental to farming includes:
243 (I) hand tools; or
244