Tax Commission, Auditing

Rule R865-12L

Local Sales and Use Tax

Five-Year Notice of Review and Statement of Continuation

DAR File No.: 35602
Filed: 01/03/2012 11:06:02 AM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Section 59-1-403 requires that all individuals with access to information from tax returns, maintain strict confidentiality with regard to that information. Also provides instances when information may be disclosed or shared. Section 59-12-202 states purpose and intent of local sales and use tax. Section 59-12-204 allows local governments to impose a local sales and use tax and sets forth the provisions that must be included in the ordinance imposing the local sales and use tax. Section 59-12-205 provides that the distribution of local sales and use taxes to local governments shall be based on location where the transaction is consummated and population. Section 59-12-210 requires that the commission provide each county with sales and use tax collection data in order to verify the revenues the commission distributes to them. Section 59-12-210.1 limits a redistribution of sales tax and provides criteria and procedures for an allowed redistribution of sales tax. Section 59-12-302 provides that the transient room tax shall be levied at the same time and collected in the same manner as the local sales and use tax. Section 59-12-354 indicates that the governing body of a municipality may choose to collect the municipality transient room tax or have the Tax Commission collect that tax for it. Section 59-12-401 establishes a resort community tax of up to 1% for towns and cities whose transient room capacity equals or exceeds 66% of the permanent census population and provides certain exemptions to that tax. Section 59-12-602 defines "convention facility" "cultural facility" "recreation facility" and "restaurant" -- all terms necessary for the administration of the tourism, recreation, cultural, and convention facilities tax. Section 59-12-603 provides for the creation of a tourism, recreation, cultural, and convention facilities tax: 1) not to exceed 3 percent on all short-term rentals of motor vehicles not exceeding 30 days; 2) not exceeding 1/2 percent of the rent for every occupancy of a suite room or rooms; and 3) not to exceed 1 percent of all sales of prepared foods and beverages sold by restaurants.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

None.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

Section R865-12L-1 provides that all rules made with respect to the state sales and use tax shall apply to the local sales and use tax. Section R865-12L-3 permits use of sales tax rate charts to determine sales tax due on a taxable sale. Section R865-12L-4 requires that the local sales and use tax be reported to the Tax Commission on a combined return with the state sales and use tax. Section R865-12L-11 outlines the sales tax liability of a person who purchases a motor vehicle from someone other than a licensed dealer. Section R865-12L-14 provides procedures for local governing bodies' review of local sales and use taxes remitted by businesses located within that political subdivision. Rule also provides procedures for corrections for firms omitted from the list of a particular political subdivision or firms listed but not doing business in the jurisdiction of the political subdivision. Section R865-12L-17 defines "primary business," and "retail establishment," and provides guidance necessary to administer the restaurant tax. Section R865-12L-18 clarifies the Tax Commission's exclusive authority to administer and enforce the local sales and use tax, and lists the circumstances under which local governments: 1) shall have access to the Tax Commission records; and 2) may intervene in or appeal from a proposed final Tax Commission action. Therefore, this rule should be continued.

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

Direct questions regarding this rule to:

• Christa Johnson at the above address, by phone at 801-297-3901, by FAX at 801-297-3907, or by Internet E-mail at cj@utah.gov

Authorized by:

Michael Cragun, Tax Commissioner

Effective:

01/03/2012