DAR File No. 27834

Tax Commission, Auditing

R865-19S-101

Application of Sales Tax to Fees Assessed in Conjunction with the Retail Sale of a Motor Vehicle Pursuant to Utah Code Ann. Section 59-12-103

NOTICE OF PROPOSED RULE

DAR File No.: 27834
Filed: 04/15/2005, 08:12
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

S.B. 147 (2003) amended the Section 59-12-102 definition of purchase price to include all charges by the seller for services necessary to complete the sale. The language being proposed to be removed is contradictory to the new statutory language. (DAR NOTE: S.B. 147 is found at UT L 2003 Ch 312, and was effective 07/01/2004.)

Summary of the rule or change:

The proposed amendment removes language that contradicts S.B. 147 (2003) and S.B. 127 (2005). (DAR NOTE: S.B. 127 is found at UT L 2005 Ch 158, and will be effective 07/01/2005.)

State statutory or constitutional authorization for this rule:

Section 59-12-103

Anticipated cost or savings to:

the state budget:

None--Any fiscal impacts were taken into account by S.B. 147 (2003) and S.B. 127 (2005).

local governments:

None--Any fiscal impacts were taken into account by S.B. 147 (2003) and S.B. 127 (2005).

other persons:

None--Any fiscal impacts were taken into account by S.B. 147 (2003) and S.B. 127 (2005).

Compliance costs for affected persons:

A purchaser of a motor vehicle will now be subject to sales tax on dealer imposed document preparation fees.

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

An automobile purchaser will pay sales tax on dealer imposed document preparation fees pursuant to Streamlined Sales Tax. Pam Hendrickson, Commission Chair

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:

Sheri McFall at the above address, by phone at 801-297-3901, by FAX at 801-297-3919, or by Internet E-mail at sherimcfall@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:

06/01/2005

This rule may become effective on:

06/02/2005

Authorized by:

Pam Hendrickson, Commissioner

RULE TEXT

R865. Tax Commission, Auditing.

R865-19S. Sales and Use Tax.

R865-19S-101. Application of Sales Tax to Fees Assessed in Conjunction with the Retail Sale of a Motor Vehicle Pursuant to Utah Code Ann. Section 59-12-103.

[A. Document preparation fees assessed in conjunction with the retail sale of a motor vehicle are not subject to the sales tax if they satisfy both of the following conditions:

1. Fees must be separately identified and segregated.

2. Fees may not be included in the total sale price upon which sales tax is calculated and collected.

B. ]State-mandated fees and taxes assessed in conjunction with the retail sale of a motor vehicle are not subject to the sales tax and must be separately identified and segregated on the invoice as required by Tax Commission rule R877-23V-14.

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

[December 21, 2004]2005

Notice of Continuation April 5, 2002

59-12-103

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Sheri McFall at the above address, by phone at 801-297-3901, by FAX at 801-297-3919, or by Internet E-mail at sherimcfall@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.