Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                           H.B. 172
       6 Approved for Filing: S. Elder 6
         6 01-06-23 10:05 AM 6
                            FOOD SALES TAX MODIFICATIONS
                                      2023 GENERAL SESSION
                                           STATE OF UTAH
                             Chief Sponsor: Rosemary T. Lesser
                                 Senate Sponsor: ____________
 6
 LONG TITLE
 General Description:
        This bill reduces the tax imposed on amounts paid or charged for certain food.
 Highlighted Provisions:
        This bill:
        < removes the state sales and use tax from amounts paid or charged for food and food
 ingredients;
        < excludes candy from the definition of food and food ingredients; and
        < makes technical and conforming changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        This bill provides a special effective date.
 Utah Code Sections Affected:
 AMENDS:
        59-12-102, as last amended by Laws of Utah 2021, Chapters 64, 367 and 414 and last
 amended by Coordination Clause, Laws of Utah 2021, Chapter 367
        59-12-103, as last amended by Laws of Utah 2022, Chapters 77, 106 and 433
        59-12-104, as last amended by Laws of Utah 2022, Chapters 228, 275, 280, and 373
                                                                                                   H.B. 172
        59-12-107.1, as last amended by Laws of Utah 2008, Chapters 382, 384
        59-12-108, as last amended by Laws of Utah 2020, Chapters 294, 407
     *HB0172*
       H.B. 172                                                                 01-06-23 10:05 AM
        59-12-603, as last amended by Laws of Utah 2020, Chapter 407
        63N-7-301, as last amended by Laws of Utah 2022, Chapters 274, 362 and last
 amended by Coordination Clause, Laws of Utah 2022, Chapter 362
31
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 59-12-102 is amended to read:
        59-12-102. Definitions.
        As used in this chapter:
        (1) "800 service" means a telecommunications service that:
        (a) allows a caller to dial a toll-free number without incurring a charge for the call; and
        (b) is typically marketed:
        (i) under the name 800 toll-free calling;
        (ii) under the name 855 toll-free calling;
        (iii) under the name 866 toll-free calling;
        (iv) under the name 877 toll-free calling;
        (v) under the name 888 toll-free calling; or
        (vi) under a name similar to Subsections (1)(b)(i) through (v) as designated by the
 Federal Communications Commission.
        (2) (a) "900 service" means an inbound toll telecommunications service that:
        (i) a subscriber purchases;
        (ii) allows a customer of the subscriber described in Subsection (2)(a)(i) to call in to
 the subscriber's:
        (A) prerecorded announcement; or
        (B) live service; and
        (iii) is typically marketed:
        (A) under the name 900 service; or
        (B) under a name similar to Subsection (2)(a)(iii)(A) as designated by the Federal
 Communications Commission.
        (b) "900 service" does not include a charge for:
        (i) a collection service a seller of a telecommunications service provides to a
 subscriber; or
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       01-06-23 10:05 AM                                                                        H.B. 172
           (ii) the following a subscriber sells to the subscriber's customer:
           (A) a product; or
           (B) a service.
           (3) (a) "Admission or user fees" includes season passes.
           (b) "Admission or user fees" does not include:
           (i) annual membership dues to private organizations; or
           (ii) a lesson, including a lesson that involves as part of the lesson equipment or a
 facility listed in Subsection 59-12-103(1)(f).
           (4) "Affiliate" or "affiliated person" means a person that, with respect to another
 person:
           (a) has an ownership interest of more than 5%, whether direct or indirect, in that other
 person; or
           (b) is related to the other person because a third person, or a group of third persons who
 are affiliated persons with respect to each other, holds an ownership interest of more than 5%,
 whether direct or indirect, in the related persons.
           (5) "Agreement" means the Streamlined Sales and Use Tax Agreement adopted on
 November 12, 2002, including amendments made to the Streamlined Sales and Use Tax
 Agreement after November 12, 2002.
           (6) "Agreement combined tax rate" means the sum of the tax rates:
           (a) listed under Subsection (7); and
           (b) that are imposed within a local taxing jurisdiction.
           (7) "Agreement sales and use tax" means a tax imposed under:
           (a) Subsection 59-12-103(2)(a)(i)(A);
           (b) Subsection 59-12-103(2)(b)(i);
           [(c) Subsection 59-12-103(2)(c)(i);]
           [(d)] (c) Subsection 59-12-103(2)(d);
           [(e)] (d) Subsection 59-12-103(2)(e)(i)(A)(I);
           [(f)] (e) Section 59-12-204;
           [(g)] (f) Section 59-12-401;
           [(h)] (g) Section 59-12-402;
           [(i)] (h) Section 59-12-402.1;
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        H.B. 172                                                                    01-06-23 10:05 AM
           [(j)] (i) Section 59-12-703;
           [(k)] (j) Section 59-12-802;
           [(l)] (k) Section 59-12-804;
           [(m)] (l) Section 59-12-1102;
           [(n)] (m) Section 59-12-1302;
           [(o)] (n) Section 59-12-1402;
           [(p)] (o) Section 59-12-1802;
           [(q)] (p) Section 59-12-2003;
           [(r)] (q) Section 59-12-2103;
           [(s)] (r) Section 59-12-2213;
           [(t)] (s) Section 59-12-2214;
           [(u)] (t) Section 59-12-2215;
           [(v)] (u) Section 59-12-2216;
           [(w)] (v) Section 59-12-2217;
           [(x)] (w) Section 59-12-2218;
           [(y)] (x) Section 59-12-2219; or
           [(z)] (y) Section 59-12-2220.
           (8) "Aircraft" means the same as that term is defined in Section 72-10-102.
           (9) "Aircraft maintenance, repair, and overhaul provider" means a business entity:
           (a) except for:
           (i) an airline as defined in Section 59-2-102; or
           (ii) an affiliated group, as defined in Section 59-7-101, except that "affiliated group"
 includes a corporation that is qualified to do business but is not otherwise doing business in the
 state, of an airline; and
           (b) that has the workers, expertise, and facilities to perform the following, regardless of
 whether the business entity performs the following in this state:
           (i) check, diagnose, overhaul, and repair:
           (A) an onboard system of a fixed wing turbine powered aircraft; and
           (B) the parts that comprise an onboard system of a fixed wing turbine powered aircraft;
           (ii) assemble, change, dismantle, inspect, and test a fixed wing turbine powered aircraft
 engine;
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        01-06-23 10:05 AM                                                                      H.B. 172
         (iii) perform at least the following maintenance on a fixed wing turbine powered
 aircraft:
         (A) an inspection;
         (B) a repair, including a structural repair or modification;
         (C) changing landing gear; and
         (D) addressing issues related to an aging fixed wing turbine powered aircraft;
         (iv) completely remove the existing paint of a fixed wing turbine powered aircraft and
 completely apply new paint to the fixed wing turbine powered aircraft; and
         (v) refurbish the interior of a fixed wing turbine powered aircraft in a manner that
 results in a change in the fixed wing turbine powered aircraft's certification requirements by the
 authority that certifies the fixed wing turbine powered aircraft.
         (10) "Alcoholic beverage" means a beverage that:
         (a) is suitable for human consumption; and
         (b) contains .5% or more alcohol by volume.
         (11) "Alternative energy" means:
         (a) biomass energy;
         (b) geothermal energy;
         (c) hydroelectric energy;
         (d) solar energy;
         (e) wind energy; or
         (f) energy that is derived from:
         (i) coal-to-liquids;
         (ii) nuclear fuel;
         (iii) oil-impregnated diatomaceous earth;
         (iv) oil sands;
         (v) oil shale;
         (vi) petroleum coke; or
         (vii) waste heat from:
         (A) an industrial facility; or
         (B) a power station in which an electric generator is driven through a process in which
 water is heated, turns into steam, and spins a steam turbine.
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        H.B. 172                                                                   01-06-23 10:05 AM
         (12) (a) Subject to Subsection (12)(b), "alternative energy electricity production
 facility" means a facility that:
         (i) uses alternative energy to produce electricity; and
         (ii) has a production capacity of two megawatts or greater.
         (b) A facility is an alternative energy electricity production facility regardless of
 whether the facility is:
         (i) connected to an electric grid; or
         (ii) located on the premises of an electricity consumer.
         (13) (a) "Ancillary service" means a service associated with, or incidental to, the
 provision of telecommunications service.
         (b) "Ancillary service" includes:
         (i) a conference bridging service;
         (ii) a detailed communications billing service;
         (iii) directory assistance;
         (iv) a vertical service; or
         (v) a voice mail service.
         (14) "Area agency on aging" means the same as that term is defined in Section
 62A-3-101.
         (15) "Assisted amusement device" means an amusement device, skill device, or ride
 device that is started and stopped by an individual:
         (a) who is not the purchaser or renter of the right to use or operate the amusement
 device, skill device, or ride device; and
         (b) at the direction of the seller of the right to use the amusement device, skill device,
 or ride device.
         (16) "Assisted cleaning or washing of tangible personal property" means cleaning or
 washing of tangible personal property if the cleaning or washing labor is primarily performed
 by an individual:
         (a) who is not the purchaser of the cleaning or washing of the tangible personal
 property; and
         (b) at the direction of the seller of the cleaning or washing of the tangible personal
 property.
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        01-06-23 10:05 AM                                                                         H.B. 172
         (17) "Authorized carrier" means:
         (a) in the case of vehicles operated over public highways, the holder of credentials
 indicating that the vehicle is or will be operated pursuant to both the International Registration
 Plan and the International Fuel Tax Agreement;
         (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
 certificate or air carrier's operating certificate; or
         (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
 stock, a person who uses locomotives, freight cars, railroad work equipment, or other rolling
 stock in more than one state.
         (18) (a) Except as provided in Subsection (18)(b), "biomass energy" means any of the
 following that is used as the primary source of energy to produce fuel or electricity:
         (i) material from a plant or tree; or
         (ii) other organic matter that is available on a renewable basis, including:
         (A) slash and brush from forests and woodlands;
         (B) animal waste;
         (C) waste vegetable oil;
         (D) methane or synthetic gas produced at a landfill, as a byproduct of the treatment of
 wastewater residuals, or through the conversion of a waste material through a nonincineration,
 thermal conversion process;
         (E) aquatic plants; and
         (F) agricultural products.
         (b) "Biomass energy" does not include:
         (i) black liquor; or
         (ii) treated woods.
         (19) (a) "Bundled transaction" means the sale of two or more items of tangible personal
 property, products, or services if the tangible personal property, products, or services are:
         (i) distinct and identifiable; and
         (ii) sold for one nonitemized price.
         (b) "Bundled transaction" does not include:
         (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
 the basis of the selection by the purchaser of the items of tangible personal property included in
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        H.B. 172                                                                    01-06-23 10:05 AM
 the transaction;
        (ii) the sale of real property;
        (iii) the sale of services to real property;
        (iv) the retail sale of tangible personal property and a service if:
        (A) the tangible personal property:
        (I) is essential to the use of the service; and
        (II) is provided exclusively in connection with the service; and
        (B) the service is the true object of the transaction;
        (v) the retail sale of two services if:
        (A) one service is provided that is essential to the use or receipt of a second service;
        (B) the first service is provided exclusively in connection with the second service; and
        (C) the second service is the true object of the transaction;
        (vi) a transaction that includes tangible personal property or a product subject to
 taxation under this chapter and tangible personal property or a product that is not subject to
 taxation under this chapter if the:
        (A) seller's purchase price of the tangible personal property or product subject to
 taxation under this chapter is de minimis; or
        (B) seller's sales price of the tangible personal property or product subject to taxation
 under this chapter is de minimis; and
        (vii) the retail sale of tangible personal property that is not subject to taxation under
 this chapter and tangible personal property that is subject to taxation under this chapter if:
        (A) that retail sale includes:
        (I) food and food ingredients;
        (II) a drug;
        (III) durable medical equipment;
        (IV) mobility enhancing equipment;
        (V) an over-the-counter drug;
        (VI) a prosthetic device; or
        (VII) a medical supply; and
        (B) subject to Subsection (19)(f):
        (I) the seller's purchase price of the tangible personal property subject to taxation under
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        01-06-23 10:05 AM                                                                          H.B. 172
 this chapter is 50% or less of the seller's total purchase price of that retail sale; or
           (II) the seller's sales price of the tangible personal property subject to taxation under
 this chapter is 50% or less of the seller's total sales price of that retail sale.
           (c) (i) For purposes of Subsection (19)(a)(i), tangible personal property, a product, or a
 service that is distinct and identifiable does not include:
           (A) packaging that:
           (I) accompanies the sale of the tangible personal property, product, or service; and
           (II) is incidental or immaterial to the sale of the tangible personal property, product, or
 service;
           (B) tangible personal property, a product, or a service provided free of charge with the
 purchase of another item of tangible personal property, a product, or a service; or
           (C) an item of tangible personal property, a product, or a service included in the
 definition of "purchase price."
           (ii) For purposes of Subsection (19)(c)(i)(B), an item of tangible personal property, a
 product, or a service is provided free of charge with the purchase of another item of tangible
 personal property, a product, or a service if the sales price of the purchased item of tangible
 personal property, product, or service does not vary depending on the inclusion of the tangible
 personal property, product, or service provided free of charge.
           (d) (i) For purposes of Subsection (19)(a)(ii), property sold for one nonitemized price
 does not include a price that is separately identified by tangible personal property, product, or
 service on the following, regardless of whether the following is in paper format or electronic
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