DAR File No. 38596

Tax Commission, Auditing

Section R865-19S-54

Governmental Exemption Pursuant to Utah Code Ann. Section 59-12-104

Notice of Proposed Rule

(Amendment)

DAR File No.: 38596
Filed: 06/12/2014 11:21:19 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The provisions of this section are unnecessary. Statutory provisions adequately describe the state and its political subdivisions that receive the state sales tax exemption. No rule is necessary to allow federal entities a state sales tax exemption. In addition, examples of federal entities are contained in Tax Commission sales tax publications. Accordingly, this section is removed.

Summary of the rule or change:

This section is removed since it is unnecessary.

State statutory or constitutional authorization for this rule:

• Section 59-12-104

Anticipated cost or savings to:

the state budget:

None--The removal of this section has no impact on practice.

local governments:

None--The removal of this section has no impact on practice.

small businesses:

None--The removal of this section has no impact on practice.

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

None--The removal of this section has no impact on practice.

Compliance costs for affected persons:

None--The removal of this section has no impact on whether an entity qualifies for this sales tax exemption.

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

The removal of this section has no impact on whether an entity qualifies for this sales tax exemption.

Robert Pero, 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:

• Robert Pero at the above address, by phone at 801-297-3800, by FAX at , or by Internet E-mail at rpero@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:

07/31/2014

This rule may become effective on:

08/07/2014

Authorized by:

Robert Pero, Commissioner

R865. Tax Commission, Auditing.

R865-19S. Sales and Use Tax.

[R865-19S-54. Governmental Exemption Pursuant to Utah Code Ann. Section 59-12-104.

A. Tax does not apply to sales to the state of Utah, or to any political subdivision of the state, where such property is for use in the exercise of an essential governmental function. Also, certain sales are not taxed because of federal law or the United States Constitution.

B. Sales to the following state and federal agencies, institutions, and instrumentalities are exempt:

1. federal agencies and instrumentalities

2. state institutions and departments

3. counties

4. municipalities

5. school districts, public schools

6. special taxing districts

7. federal land banks

8. federal reserve banks

9. activity funds within the armed services

10. post exchanges

11. Federally chartered credit unions

C. The following are taxable:

1. national banks

2. federal building and loan associations

3. joint stock land banks

4. state banks (whether or not members of the Federal Reserve System)

5. state building and loan associations

6. private irrigation companies

7. rural electrification projects

8. sales to officers or employees of exempt instrumentalities

D. No sales tax immunity exists solely by virtue of the fact that the sale was made on federal property.

E. Sales made by governmental units are subject to sales tax.

 

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

Date of Enactment or Last Substantive Amendment: [July 26, 2012]2014

Notice of Continuation: January 3, 2012

Authorizing, and Implemented or Interpreted Law: 9-2-1702; 9-2-1703; 10-1-303; 10-1-306; 10-1-307; 10-1-405; 19-6-808; 26-32a-101 through 26-32a-113; 59-1-210; 59-12; 59-12-102; 59-12-103; 59-12-104; 59-12-105; 59-12-106; 59-12-107; 59-12-108; 59-12-118; 59-12-301; 59-12-352; 59-12-353