No. 29019 (Amendment): R865-19S-32. Leases and Rentals Pursuant to Utah Code Ann. Section 59-12-103

DAR File No.: 29019
Filed: 09/14/2006, 02:34
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed amendment clarifies statutory language setting forth the sales tax responsibilities of certain vendors.

Summary of the rule or change:

The proposed amendment deletes language that appears in statute; and clarifies language that indicates the sales tax responsibility of a person that furnishes tangible personal property with an operator.

State statutory or constitutional authorization for this rule:

Section 59-12-103

Anticipated cost or savings to:

the state budget:

None--The proposed amendment does not alter the sales tax responsibility of a person that furnishes tangible personal property with an operator.

local governments:

None--The proposed amendment does not alter the sales tax responsibility of a person that furnishes tangible personal property with an operator.

other persons:

None--The proposed amendment does not alter the sales tax responsibility of a person that furnishes tangible personal property with an operator.

Compliance costs for affected persons:

None--Under this amendment, a vendor that furnishes tangible personal property with an operator will remain as they currently exist.

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

There are no foreseen fiscal impacts to businesses with this rule. D'Arcy Dixon, 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:

Cheryl Lee at the above address, by phone at 801-297-3900, by FAX at 801-297-3919, or by Internet E-mail at [e-mail]

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:

10/31/2006

This rule may become effective on:

11/07/2006

Authorized by:

D'Arcy Dixon, Commissioner

RULE TEXT

R865. Tax Commission, Auditing.

R865-19S. Sales and Use Tax.

R865-19S-32. Leases and Rentals Pursuant to Utah Code Ann. Section 59-12-103.

[A.](1) The lessor shall compute sales or use tax on all amounts received or charged in connection with a lease or rental of tangible personal property.

[B.](2) When a lessee has the right to possession, operation, or use of tangible personal property, the tax applies to the amount paid pursuant to the lease agreement, regardless of the duration of the agreement.

[C.](3) Lessors of tangible personal property shall furnish an exemption certificate when purchasing tangible personal property subject to the sales or use tax on rental receipts. Costs of repairs and renovations to tangible personal property are exempt if paid for by the lessor since it is assumed that those costs are recovered by the lessor in his rental receipts.

[D.](4) [Persons who furnish an operator with the rental equipment and charge for the use of the equipment and personnel are regarded as the consumers of the property leased or rented. An example of this type of rental is the furnishing of a crane and its operating personnel to a building erector. Sales or use tax then applies to the purchase of the equipment by the lessor rather than to the rental revenue.]A person that furnishes tangible personal property along with an operator, as described in the definition of lease or rental in Section 59-12-102, provides a service and shall:

(a) pay sales and use tax at the time that person purchases the tangible personal property that is furnished under this Subsection (4); and

(b) collect sales and use tax at the time that person provides the service if the service is subject to sales and use tax.[

E. Rentals to be applied on a future sale or purchase are subject to sales or use tax.]

 

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

Date of Enactment or Last Substantive Amendment: [October 13, 2005]2006

Notice of Continuation: April 5, 2002

Authorizing, and Implemented or Interpreted Law: 59-12-103