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Recent Utah legislation changed the taxability for non-residents who purchase property outside of the state and bring it into Utah for personal use. These items are no longer subject to use tax. To apply, the nonresident individual cannot live or work in Utah at the time of the purchase and must not use the property for business purposes. With the exception of boats which are registered outside of Utah, the first use of the property must occur outside of the state. The exemption is not available for leases or rentals of property. (H.B. 34, Laws 2007, effective July 1, 2007)


A response letter to a taxpayer’s inquiry stated that the purchase of new printing presses for use in a new facility (as upgrades to the printer’s operations) qualified for the manufacturing exemption from Utah sales and use tax under both current law and prior law. Under the current version of the law, new printing presses for manufacturing printed materials would qualify as “machinery and equipment” used in a manufacturing facility to manufacture an item sold as tangible personal property, having an economic life of three years or more and, therefore, qualify for the exemption. Under prior law, although the statute made a distinction between equipment for “new and expanding operations” and “normal operating replacements’, the printing presses would still have been exempt regardless of their characterization as new equipment or operating replacements. (Private Letter Ruling, Opinion No. 06-001, Utah State Tax Commission)


Effective July, 2006, Utah exempts from sales and use tax any amounts paid for transportation by a common carrier. Common carrier is defined as “a person engaged in the business of transporting passengers, freight, merchandise, or other property for hire within this state”. Certain exclusions to this definition apply. (Ch. 182, H.B. 52, Laws 2006)


In response to a taxpayer’s request for tax guidance, a private letter ruling was issued by the Utah State Tax Commission describing the taxability of defibrillators and other related services. If defibrillators and their repair or replacement parts are sold with a prescription for home use only, they may qualify to be durable medical equipment, and thus be exempt from Utah sales tax. However, if the exempt defibrillator is bundled together with other taxable charges, then the entire sale is subject to tax. Furthermore, under the Utah Tax Code, any service necessary to complete the sale is considered to be part of the purchase price and, therefore, services needed to complete a sale of a taxable defibrillator are taxable, even if separately-stated on the invoice. Conversely, services that are optional are exempt. Therefore, unbundled charges for services sold with defibrillators are exempt. (Private Letter Ruling, Opinion No. 04-023, Utah State Tax Commission)


Utah sales and use tax rules have been amended to clarify certain rules of leases and rentals involving tangible personal property. For example, vendors who rent or lease tangible personal property along with operating personnel must pay sales and use tax on their original purchases of the property and must collect sales and use tax when providing a taxable service. An example of this type of rental is the furnishing of a crane and its operating personnel to a building erector. (Rule R865-19S-32, Utah State Tax Commission, November 17, 2006)



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