DAR File No. 27485

Tax Commission, Auditing

R865-19S-119

Certain Transactions Involving Food and Lodging Pursuant to Utah Code Ann. Sections 59-12-103 and 59-12-104

NOTICE OF PROPOSED RULE

DAR File No.: 27485
Filed: 10/08/2004, 01:34
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

Section 59-12-103 imposes a sales tax on the consumer of tangible personal property and certain services. Section 54-12-104 provides an exemption to the sales tax for a sale of goods that will be resold.

Summary of the rule or change:

The proposed new section indicates when a seller of food and lodging, that is not a restaurant, may purchase food tax exempt as a sale for resale, and when that seller must pay tax on the purchase of food as food the seller consumes.

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--Currently, a seller qualifies for this exemption if the seller separately lists the meal on the invoice. Under this proposed section, the seller will qualify for the exemption if the seller separately lists the tax imposed on the sale of the meal. The seller is not required to separately list the cost of the meal.

local governments:

None--Currently, a seller qualifies for this exemption if the seller separately lists the meal on the invoice. Under this proposed section, the seller will qualify for the exemption if the seller separately lists the tax imposed on the sale of the meal. The seller is not required to separately list the cost of the meal.

other persons:

None--Currently, a seller qualifies for this exemption if the seller separately lists the meal on the invoice. Under this proposed section, the seller will qualify for the exemption if the seller separately lists the tax imposed on the sale of the meal. The seller is not required to separately list the cost of the meal.

Compliance costs for affected persons:

None--A seller may continue to separately list the cost of the meal on the invoice, or the seller may choose to only list the tax associated with the sale of the meal on the invoice.

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

There will be no fiscal impact on businesses as a result of this amendment.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

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 clee@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:

12/01/2004

This rule may become effective on:

12/02/2004

Authorized by:

Pam Hendrickson, Commissioner

RULE TEXT

R865. Tax Commission, Auditing.

R865-19S. Sales and Use Tax.

R865-19S-119. Certain Transactions Involving Food and Lodging Pursuant to Utah Code Ann. Sections 59-12-103 and 59-12-104.

A. The provisions of this rule apply to a seller that:

1. is not a restaurant; and

2. provides a purchaser both food and lodging.

B. If a seller does not separately state an amount for tax applicable to food on the invoice, the seller must:

1. pay sales and use tax on the food at the time the seller purchases the food; and

2. include the food in the base that is subject to transient room tax.

C. Subject to D., if a seller separately states an amount for tax applicable to food on the invoice, the seller:

1. may purchase the food tax exempt from sales and use tax as a sale for resale; and

2. may not include the food in the base that is subject to transient room tax.

D. A seller that separately states an amount for tax applicable to food on the invoice must ensure that those amounts are accurately reflected in the seller's records.

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

[June 29, ]2004

Notice of Continuation April 5, 2002

59-12-103

59-12-104

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Cheryl Lee at the above address, by phone at 801-297-3900, by FAX at 801-297-3919, or by Internet E-mail at clee@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.