Tax Commission, Auditing

Section R865-21U-6

Liability of Purchasers and Receipt For Payment to Retailers Pursuant to Utah Code Ann. Section 59-12-107

Notice of Proposed Rule

(Amendment)

DAR File No.: 36362
Filed: 06/14/2012 12:20:19 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed amendment provides guidance to purchasers on the form to use to pay use tax.

Summary of the rule or change:

Prior to the amendment: 1) a purchaser that was not required to obtain a sales tax license was required to pay the use tax on the purchaser's income tax return; and 2) if a purchaser that was otherwise not required to obtain a sales tax license had a use tax liability that exceeded $400, that purchaser was required to obtain a sales tax license and pay the use tax liability on a sales tax return. The proposed amendment provides that regardless of the amount of the use tax liability, a purchaser who is otherwise not required to obtain a sales tax license shall pay the use tax liability on the purchaser's income tax return, defines terms, and repeals unnecessary language.

State statutory or constitutional authorization for this rule:

• Section 59-12-107

Anticipated cost or savings to:

the state budget:

None--The proposed amendment indicates the form on which certain purchasers shall file and remit use tax.

local governments:

None--The proposed amendment indicates the form on which certain purchasers shall file and remit use tax.

small businesses:

None--The proposed amendment indicates the form on which certain purchasers shall file and remit use tax.

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

None--The proposed amendment indicates the form on which certain purchasers shall file and remit use tax.

Compliance costs for affected persons:

None--The proposed amendment relieves certain purchasers of the requirement to obtain a sales tax license and indicates the forms on which a use tax liability shall be paid.

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

The amendment specifies a form; it does not create any new fiscal impact.

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:

• 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

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:

07/31/2012

This rule may become effective on:

08/07/2012

Authorized by:

Michael Cragun, Tax Commissioner

R865. Tax Commission, Auditing.

R865-21U. Use Tax.

R865-21U-6. Liability of Purchasers [and Receipt For]for Payment [to Retailers]of Tax Pursuant to Utah Code Ann. Section 59-12-107.

(1) For purposes of this section:

(a) "Income tax return" means a tax return filed under:

(i) Title 59, Chapter 7, Corporate Franchise and Income Taxes; or

(ii) Title 59, Chapter 10, Individual Income Tax Act, except for Title 59, Chapter 10, Part 4.

(b) "Sales tax license" means a license issued under Title 59, Chapter 12, Sales and Use Tax Act.

[A.](2) [Purchasers]A purchaser of [tangible personal property--the storage, use, or other consumption of which]an item that is subject to sales and use tax[--]must account for the tax liability by paying the tax:

[1.](a) to the [retailer]seller from whom the [property]item was purchased if [such retailer holds a certificate of registration under the use tax act. When property is purchased from a registered retailer, the purchaser is not relieved from the tax liability unless a receipt is obtained from such retailer. This receipt need not be in any particular form but must show the name and registration number of the retailer, the name of the purchaser, the date of the sale, description of the property or reference to the sales invoice, the purchase price, and amount of tax. A sales invoice containing the above information, together with evidence of payment of such invoice, will constitute a receipt. Payment of the tax to a registered retailer under these conditions relieves the purchaser of any further liability.]the seller has a sales tax license; or

[2.](b) directly to the [Tax Commission]commission if the [retailer]seller from whom the [property]item was purchased does not [hold a certificate of registration. Under these circumstances, one of the following procedures must be followed:]collect the sales tax from the purchaser.

(3) A purchaser that is subject to Subsection (2)(b) shall:

(a) if the [purchases are made by a business required by Section 59-12-106 to hold or obtain]purchaser has a sales tax license [or a use tax certificate of registration,]pay the tax [is paid on a]on the purchaser's sales and use tax return; or

[ (b) if the purchases are made by any person as defined in Utah Code Ann. Section 59-12-102, who has no sales tax collection responsibility, and if the annual taxes due may be reasonably expected to exceed $400, such person must apply for registration as a consumer and pay the tax using a quarterly use tax return; or

] [(c)](b) if the [purchases are made by an individual who has no sales tax collection responsibility and the annual use tax liability is less than $400, the tax is remitted using]purchaser does not have a sales tax license, pay the tax on the purchaser's[individual] income tax return[filed each year].

(4)(a) [The tax is computed by]A purchaser paying the tax to the commission under Subsection (3)(b) shall compute the tax using the rates provided in the income tax instructions for the address of the [consumer]purchaser as shown on the [individual] income tax [form]return.

[ If a consumer files as a part-year resident, the latest address in Utah is the basis for the use tax rate to report purchases subject to use tax made during the Utah residency period.

] (b) If [the]a purchaser [does not meet]is not required to file an [individual] income tax [filing requirements]return, the purchaser [obtains an income tax filing form and]shall:

(i) [reports and pays the use tax on this form.]report and pay the tax on the income tax return the purchaser would otherwise be required to file; and

(ii) [A]include with the return a statement [to the effect]stating that no income tax is due and that the return is submitted for payment of use tax only[ shall be included with this form. An individual required to report use tax under this subsection satisfies all Tax Commission filing requirements by reporting and remitting the tax due within the time allowed to timely file his individual income tax return].

 

KEY: taxation, user tax

Date of Enactment or Last Substantive Amendment: [January 1, 2009]2012

Notice of Continuation: October 28, 2010

Authorizing, and Implemented or Interpreted Law: 59-12-103; 59-12-107; 59-12-104; 59-12-118