DAR File No. 40854

Tax Commission, Auditing

Section R865-19S-41

Sales to The United States Government and Its Instrumentalities Pursuant to Utah Code Ann. Sections 59-12-104 and 59-12-106

Notice of Proposed Rule

(Amendment)

DAR File No.: 40854
Filed: 10/04/2016 03:06:23 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed amendment deletes language that is unenforceable.

Summary of the rule or change:

The proposed amendment deletes language that requires the federal government to pay sales tax on merchandise or services it pays for with funds held in trust for nonexempt individuals or organizations. There is no statutory authority for this language.

Statutory or constitutional authorization for this rule:

• Section 59-12-104
• Section 59-12-106

Anticipated cost or savings to:

the state budget:

None--The Tax Commission is not enforcing this provision.

local governments:

None--The Tax Commission is not enforcing this provision.

small businesses:

None--The Tax Commission is not enforcing this provision.

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

None--The Tax Commission is not enforcing this provision.

Compliance costs for affected persons:

None--There is no statutory authority for this provision. Accordingly, the Tax Commission is unable to enforce this provision.

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

The proposal amendment results in no fiscal impact on businesses because the provision is unable to be enforced.

Rebecca Rockwell, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Office 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:

12/01/2016

This rule may become effective on:

12/08/2016

Authorized by:

Rebecca Rockwell, Commissioner

R865. Tax Commission, Auditing.

R865-19S. Sales and Use Tax.

R865-19S-41. Sales to The United States Government and Its Instrumentalities Pursuant to Utah Code Ann. Sections 59-12-104 and 59-12-106.

[A.](1) Sales to the United States government are exempt if federal law or the United States Constitution prohibits the collection of sales or use tax.

[B. If the United States government pays for merchandise or services with funds held in trust for nonexempt individuals or organizations, sales tax must be charged.]

[C.](2) Sales made directly to the United States government or any authorized instrumentality thereof are not taxable, provided the sale is paid for directly by the federal government. If an employee of the federal government pays for the purchase with his own funds and is reimbursed by the federal government, that sale is not made to the federal government and does not qualify for the exemption.

[D.](3) Vendors making exempt sales to the federal government are subject to the recordkeeping requirements of Tax Commission rule R865-19S-23.

 

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

Date of Enactment or Last Substantive Amendment: [April 14], 2016

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