Tax Commission, Auditing

Section R865-19S-4

Collection of Tax Pursuant to Utah Code Ann. Section 59-12-107

Notice of Proposed Rule

(Amendment)

DAR File No.: 33848
Filed: 07/20/2010 10:43:14 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed amendment will treat all transactions in the same manner as bundled transactions are treated under statute.

Summary of the rule or change:

The amendment provides that in a purchase consisting of taxable and nontaxable items, the entire purchase is subject to sales tax unless the nontaxable items are separately stated on the invoice or the seller is able to identify by reasonable and identifiable standards the nontaxable items from the books and records the seller keeps in the seller's regular course of business. This same concept applies to a transaction with items subject to sales tax at different tax rates. The amendment also makes technical changes.

State statutory or constitutional authorization for this rule:

• Section 59-12-107

Anticipated cost or savings to:

the state budget:

None--The proposed amendment does not impact the amount of tax due; only the recordkeeping requirements of the seller.

local governments:

The proposed amendment does not impact the amount of tax due; only the recordkeeping requirements of the seller.

small businesses:

None--Sellers are currently acting within the scope of the proposed amendment. The proposed amendment will allow sellers who sell taxable and nontaxable items in a nonbundled transaction the same invoicing options as the seller of a bundled transaction.

persons other than small businesses, businesses, or local governmental entities:

None--Sellers are currently acting within the scope of the proposed amendment. The proposed amendment will allow sellers who sell taxable and nontaxable items in a nonbundled transaction the same invoicing options as the seller of a bundled transaction.

Compliance costs for affected persons:

None--Sellers are currently acting within the scope of the proposed amendment. The proposed amendment will allow sellers who sell taxable and nontaxable items in a nonbundled transaction the same invoicing options as the seller of a bundled transaction.

Comments by the department head on the fiscal impact the rule may have on businesses:

None anticipated.

Michael Cragun, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Tax Commission
Auditing
210 N 1950 W
SALT LAKE CITY, UT 84134

Direct questions regarding this rule to:

• Michael Cragun at the above address, by phone at 801-297-3907, by FAX at 801-297-3919, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

09/14/2010

This rule may become effective on:

09/21/2010

Authorized by:

R. Bruce Johnson, Tax Commission Chair

R865. Tax Commission, Auditing.

R865-19S. Sales and Use Tax.

R865-19S-4. Collection of Tax Pursuant to Utah Code Ann. Section 59-12-107.

(1) For purposes of this rule, "item" includes:

(a) an admission;

(b) a product transferred electronically;

(c) a service; and

(d) tangible personal property.

[A.](2)(a) An invoice or receipt issued by a [vendor]seller shall [show]separately state the sales tax collected [as a separate item] on the invoice or receipt.

[B.](b) If an invoice or receipt issued by a [vendor]seller does not show the sales tax collected as required in [A.]Subsection (2)(a), sales tax will be assessed on the [vendor]seller or purchaser based on the amount of the invoice or receipt.

(3) Unless otherwise provided by statute, if a purchase consists of items that are exempt from sales tax and items that are subject to sales tax, the entire purchase is subject to sales tax unless the seller, at the time of the transaction:

(a) separately states the tax exempt items on the invoice; or

(b) is able to identify by reasonable and identifiable standards, from the books and records the seller keeps in the seller's regular course of business, the items exempt from sales tax.

(4) Unless otherwise provided by statute, if a purchase consists of two or more items that are subject to sales tax at different rates, the entire purchase is subject to sales tax at the higher tax rate unless the seller, at the time of the transaction:

(a) separately states on the invoice the items subject to sales tax at each of the different sales tax rates; or

(b) is able to identify by reasonable and identifiable standards, from the books and records the seller keeps in the seller's regular course of business, the items subject to sales tax at the lower tax rate.

[C.](5) A [vendor]seller that collects an excess amount of sales or use tax must either refund the excess to the purchasers from whom the [vendor]seller collected the excess or remit the excess to the [Commission]commission.

[1.](a) A [vendor]seller may offset an undercollection of tax on sales against any excess tax collected in the same reporting period.

[2.](b) A [vendor]seller may not offset an underpayment of tax on the [vendor's]seller's purchases against an excess of tax collected.

 

KEY: charities, tax exemptions, religious activities, sales tax

Date of Enactment or Last Substantive Amendment: [ September 17, 2009 ] 2010

Notice of Continuation: March 13, 2007

Authorizing, and Implemented or Interpreted Law: 59-12-107