No. 27077 (Amendment): R865-19S-71. Transportation Charges in Connection With the Sale of Tangible Personal Property Pursuant to Utah Code Ann. Sections 59-12-103 and 59-12-104

DAR File No.: 27077
Filed: 04/12/2004, 03:54
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

Section 59-12-102 provides that delivery charges are included in the purchase price, and, accordingly, subject to sales tax.

 

Summary of the rule or change:

This section is deleted in its entirety.

 

State statutory or constitutional authorization for this rule:

Sections 59-12-103 and 59-12-104

 

Anticipated cost or savings to:

the state budget:

None--Any impacts should have been taken into account by S.B. 147 (2003). (DAR NOTE: S.B. 147 is found at UT L 2003 Ch 312, and will be effective July 1, 2004.)

 

local governments:

None--Any impacts should have been taken into account by S.B. 147 (2003).

 

other persons:

None--Any impacts should have been taken into account by S.B. 147 (2003).

 

Compliance costs for affected persons:

Individuals will now pay sales tax on the delivery of items that they purchase.

 

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

Pursuant to Streamlined Sales Tax, individuals will now pay sales tax on the delivery of items that they purchase.

 

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:

06/01/2004

 

This rule may become effective on:

06/02/2004

 

Authorized by:

Pam Hendrickson, Commissioner

 

 

RULE TEXT

R865. Tax Commission, Auditing.

R865-19S. Sales and Use Tax.

[R865-19S-71. Transportation Charges in Connection With the Sale of Tangible Personal Property Pursuant to Utah Code Ann. Sections 59-12-103 and 59-12-104.

A. To qualify for the sales tax exemption for movements of freight by common carrier, transportation charges must satisfy all of the following conditions:

1. Shipment must take place by means of common carrier.

2. Charges must be segregated and listed separately.

3. Charges must reflect the actual cost of shipping the particular tangible personal property by common carrier.

4. Shipment of the tangible personal property must take place after passage of title.

a) Shipment of the tangible personal property takes place after passage of title if the terms of the sale or lease are F.O. B. origin or F.O.B. shipping point.

b) If the invoice does not indicate an F.O.B. point, and a common carrier is used, it is assumed the terms are F.O.B. origin.

c) In all other cases, the shipment of tangible personal property takes place before passage of title.

B. If shipment of the tangible personal property occurs before the passage of title, shipping costs, to the extent included in the sales price of the item, and regardless of whether they are segregated on the invoice, shall be included in the sales and use tax base.

]

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

[October 29, 2003]2004

Notice of Continuation April 5, 2002

59-12-103

59-12-104