59-12-106 - Definitions -- Sales and use tax license requirements -- Penalty -- Application process and requirements -- No fee -- Bonds -- Presumption of taxability -- Exemption certificates -- Exempt
59-12-106. Definitions -- Sales and use tax license requirements -- Penalty --Application process and requirements -- No fee -- Bonds -- Presumption of taxability --Exemption certificates -- Exemption certificate license number to accompany contract bids.
(1) As used in this section:
(a) "applicant" means a person that:
(i) is required by this section to obtain a license; and
(ii) submits an application:
(A) to the commission; and
(B) for a license under this section;
(b) "application" means an application for a license under this section;
(c) "fiduciary of the applicant" means a person that:
(i) is required to collect, truthfully account for, and pay over a tax under this chapter foran applicant; and
(ii) (A) is a corporate officer of the applicant described in Subsection (1)(c)(i);
(B) is a director of the applicant described in Subsection (1)(c)(i);
(C) is an employee of the applicant described in Subsection (1)(c)(i);
(D) is a partner of the applicant described in Subsection (1)(c)(i);
(E) is a trustee of the applicant described in Subsection (1)(c)(i); or
(F) has a relationship to the applicant described in Subsection (1)(c)(i) that is similar to arelationship described in Subsections (1)(c)(ii)(A) through (E) as determined by the commissionby rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
(d) "fiduciary of the licensee" means a person that:
(i) is required to collect, truthfully account for, and pay over a tax under this chapter for alicensee; and
(ii) (A) is a corporate officer of the licensee described in Subsection (1)(d)(i);
(B) is a director of the licensee described in Subsection (1)(d)(i);
(C) is an employee of the licensee described in Subsection (1)(d)(i);
(D) is a partner of the licensee described in Subsection (1)(d)(i);
(E) is a trustee of the licensee described in Subsection (1)(d)(i); or
(F) has a relationship to the licensee described in Subsection (1)(d)(i) that is similar to arelationship described in Subsections (1)(d)(ii)(A) through (E) as determined by the commissionby rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
(e) "license" means a license under this section; and
(f) "licensee" means a person that is licensed under this section by the commission.
(2) (a) It is unlawful for any person required to collect a tax under this chapter to engagein business within the state without first having obtained a license to do so.
(b) The license described in Subsection (2)(a):
(i) shall be granted and issued by the commission;
(ii) is not assignable;
(iii) is valid only for the person in whose name the license is issued;
(iv) is valid until:
(A) the person described in Subsection (2)(b)(iii):
(I) ceases to do business; or
(II) changes that person's business address; or
(B) the license is revoked by the commission; and
(v) subject to Subsection (2)(d), shall be granted by the commission only upon anapplication that:
(A) states the name and address of the applicant; and
(B) provides other information the commission may require.
(c) At the time an applicant makes an application under Subsection (2)(b)(v), thecommission shall notify the applicant of the responsibilities and liability of a business ownersuccessor under Section 59-12-112.
(d) The commission shall review an application and determine whether the applicant:
(i) meets the requirements of this section to be issued a license; and
(ii) is required to post a bond with the commission in accordance with Subsections (2)(e)and (f) before the applicant may be issued a license.
(e) (i) An applicant shall post a bond with the commission before the commission mayissue the applicant a license if:
(A) a license under this section was revoked for a delinquency under this chapter for:
(I) the applicant;
(II) a fiduciary of the applicant; or
(III) a person for which the applicant or the fiduciary of the applicant is required tocollect, truthfully account for, and pay over a tax under this chapter; or
(B) there is a delinquency in paying a tax under this chapter for:
(I) the applicant;
(II) a fiduciary of the applicant; or
(III) a person for which the applicant or the fiduciary of the applicant is required tocollect, truthfully account for, and pay over a tax under this chapter.
(ii) If the commission determines it is necessary to ensure compliance with this chapter,the commission may require a licensee to:
(A) for a licensee that has not posted a bond under this section with the commission, posta bond with the commission in accordance with Subsection (2)(f); or
(B) for a licensee that has posted a bond under this section with the commission, increasethe amount of the bond posted with the commission.
(f) (i) A bond required by Subsection (2)(e) shall be:
(A) executed by:
(I) for an applicant, the applicant as principal, with a corporate surety; or
(II) for a licensee, the licensee as principal, with a corporate surety; and
(B) payable to the commission conditioned upon the faithful performance of all of therequirements of this chapter including:
(I) the payment of any tax under this chapter;
(II) the payment of any:
(Aa) penalty as provided in Section 59-1-401; or
(Bb) interest as provided in Section 59-1-402; or
(III) any other obligation of the:
(Aa) applicant under this chapter; or
(Bb) licensee under this chapter.
(ii) Except as provided in Subsection (2)(f)(iv), the commission shall calculate theamount of a bond required by Subsection (2)(e) on the basis of:
(A) commission estimates of:
(I) an applicant's tax liability under this chapter; or
(II) a licensee's tax liability under this chapter; and
(B) any amount of a delinquency described in Subsection (2)(f)(iii).
(iii) Except as provided in Subsection (2)(f)(iv), for purposes of Subsection (2)(f)(ii)(B):
(A) for an applicant, the amount of the delinquency is the sum of:
(I) the amount of any delinquency that served as a basis for revoking the license underthis section of:
(Aa) the applicant;
(Bb) a fiduciary of the applicant; or
(Cc) a person for which the applicant or the fiduciary of the applicant is required tocollect, truthfully account for, and pay over a tax under this chapter; or
(II) the amount of tax that any of the following owe under this chapter:
(Aa) the applicant;
(Bb) a fiduciary of the applicant; and
(Cc) a person for which the applicant or the fiduciary of the applicant is required tocollect, truthfully account for, and pay over a tax under this chapter; or
(B) for a licensee, the amount of the delinquency is the sum of:
(I) the amount of any delinquency that served as a basis for revoking the license underthis section of:
(Aa) the licensee;
(Bb) a fiduciary of the licensee; or
(Cc) a person for which the licensee or the fiduciary of the licensee is required to collect,truthfully account for, and pay over a tax under this chapter; or
(II) the amount of tax that any of the following owe under this chapter:
(Aa) the licensee;
(Bb) a fiduciary of the licensee; and
(Cc) a person for which the licensee or the fiduciary of the licensee is required to collect,truthfully account for, and pay over a tax under this chapter.
(iv) Notwithstanding Subsection (2)(f)(ii) or (2)(f)(iii), a bond required by Subsection(2)(e) may not:
(A) be less than $25,000; or
(B) exceed $500,000.
(g) If business is transacted at two or more separate places by one person, a separatelicense for each place of business is required.
(h) (i) The commission shall, on a reasonable notice and after a hearing, revoke thelicense of any licensee violating any provisions of this chapter.
(ii) A license may not be issued to a licensee described in Subsection (2)(h)(i) until thelicensee has complied with the requirements of this chapter, including:
(A) paying any:
(I) tax due under this chapter;
(II) penalty as provided in Section 59-1-401; or
(III) interest as provided in Section 59-1-402; and
(B) posting a bond in accordance with Subsections (2)(e) and (f).
(i) Any person required to collect a tax under this chapter within this state without havingsecured a license to do so is guilty of a criminal violation as provided in Section 59-1-401.
(j) A license:
(i) is not required for any person engaged exclusively in the business of sellingcommodities that are exempt from taxation under this chapter; and
(ii) shall be issued to the person by the commission without a license fee.
(3) (a) For the purpose of the proper administration of this chapter and to prevent evasionof the tax and the duty to collect the tax, it shall be presumed that tangible personal property orany other taxable transaction under Subsection 59-12-103(1) sold by any person for delivery inthis state is sold for storage, use, or other consumption in this state unless the person selling theproperty, item, or service has taken from the purchaser an exemption certificate:
(i) bearing the name and address of the purchaser; and
(ii) providing that the property, item, or service was exempted under Section 59-12-104.
(b) An exemption certificate described in Subsection (3)(a):
(i) shall contain information as prescribed by the commission; and
(ii) if a paper exemption certificate is used, shall be signed by the purchaser.
(c) (i) Subject to Subsection (3)(c)(ii), a seller or certified service provider is not liable tocollect a tax under this chapter if the seller or certified service provider obtains within 90 daysafter a transaction is complete:
(A) an exemption certificate containing the information required by Subsections (3)(a)and (b); or
(B) the information required by Subsections (3)(a) and (b).
(ii) A seller or certified service provider that does not obtain the exemption certificate orinformation described in Subsection (3)(c)(i) with respect to a transaction may, within 120 daysafter the commission requests the seller or certified service provider to substantiate theexemption:
(A) establish that the transaction is not subject to taxation under this chapter by a meansother than providing an exemption certificate containing the information required by Subsections(3)(a) and (b); or
(B) obtain an exemption certificate containing the information required by Subsections(3)(a) and (b), taken in good faith.
(d) Except as provided in Subsection (3)(e), a seller or certified service provider thattakes an exemption certificate from a purchaser in accordance with this Subsection (3) withrespect to a transaction is not liable to collect a tax under this chapter:
(i) on that transaction; and
(ii) if the commission or a court of competent jurisdiction subsequently determines thatthe purchaser improperly claimed the exemption.
(e) Subsection (3)(d) does not apply to a seller or certified service provider that:
(i) fraudulently fails to collect a tax under this chapter;
(ii) solicits a purchaser to participate in improperly claiming an exemption from a taxunder this chapter; or
(iii) accepts an exemption certificate for an exemption that is allowed on the basis of theentity claiming the exemption if:
(A) the purchaser receives the tangible personal property, product, or service that is thesubject of the exemption certificate at a location operated by the seller; and
(B) the exemption certificate states that the tangible personal property, product, orservice is not exempt from taxation under this chapter.
(4) A person filing a contract bid with the state or a political subdivision of the state forthe sale of tangible personal property or any other taxable transaction under Subsection59-12-103(1) shall include with the bid the number of the license issued to that person underSubsection (2).
Amended by Chapter 382, 2008 General Session
Amended by Chapter 384, 2008 General Session