DAR File No. 32030

Tax Commission, Auditing

R865-19S-29

Wholesale Sale Defined Pursuant to Utah Code Ann. Section 59-12-102

NOTICE OF PROPOSED RULE

DAR File No.: 32030
Filed: 10/13/2008, 10:17
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The section is removed because it is unnecessary repetition of statutes and other sections.

Summary of the rule or change:

The section is removed.

State statutory or constitutional authorization for this rule:

Section 59-12-102

Anticipated cost or savings to:

the state budget:

None--The section contained language duplicative of statutes and other sections.

local governments:

None--The section contained language duplicative of statues and other sections.

small businesses and persons other than businesses:

None--The section contained language duplicative of statutes and other sections.

Compliance costs for affected persons:

None--The section is removed because it is unnecessary.

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

None--The section is repetitive of other statutes and sections. 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 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:

12/01/2008

This rule may become effective on:

01/01/2009

Authorized by:

D'Arcy Dixon, Commissioner

R865. Tax Commission, Auditing.

R865-19S. Sales and Use Tax.

[R865-19S-29. Wholesale Sale Defined Pursuant to Utah Code Ann. Section 59-12-102.

A. "Wholesale sale" means any sale by a wholesaler, retailer, or any other person, of tangible personal property or services to a retailer, jobber, dealer, or another wholesaler for resale.

1. All sales of tangible personal property or services which enter into and become an integral or component part of tangible personal property or product which is further manufactured or compounded for sale, or the container or the shipping case thereof, are wholesale sales.

2. All sales of poultry, dairy, or other livestock feed and the components thereof and all seeds and seedlings are deemed to be wholesale sales where the eggs, milk, meat, or other livestock products, plants, or plant products are produced for resale.

3. Sprays and insecticides used in the control of insect pests, diseases, and weeds for the commercial production of fruit, vegetables, feeds, seeds, and animal products shall be wholesale sales. Also baling ties and twine for baling hay and straw and fuel sold to farmers and agriculture producers for use in heating orchards and providing power in off-highway type farm machinery shall be wholesale sales.

B. Tangible personal property or services which are purchased by a manufacturer or compounder which do not become and remain an integral part of the article being manufactured or compounded are subject to sales or use tax.

1. For example, sales to a knitting factory of machinery, lubricating oil, pattern paper, office supplies and equipment, laundry service, and repair labor are for consumption and are taxable. These services and tangible personal property do not become component parts of the manufactured products. On the other hand, sales of wool, thread, buttons, linings, and yarns, to such a manufacturer that do become component parts of the products manufactured are not taxable.

C. The price of tangible personal property or services sold or the quantity sold are not factors which determine whether or not the sale is a wholesale sale.

D. All vendors who make wholesale sales are required to obtain an exemption certificate from the purchaser as evidence of the nature of the sale, as required by Rule R865-19S-23.

 

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

Date of Enactment or Last Substantive Amendment: [August 18, 2008]2009

Notice of Continuation: March 13, 2007

Authorizing, and Implemented or Interpreted Law: 59-12-102