The 2000 Utah Legislature passed the following sales tax legislation affecting counties, cities, and towns.

Use of Sales and Use Tax Revenues
Senate Bill 34 provides that, effective July 1, 2000, a county, and a city or town within that county, that has issued bonds to finance sports or recreational facilities or that is leasing sports or recreational facilities may, upon resolution by its legislative body, direct the Tax Commission to divert a portion of that county's, city's, or town's local sales and use tax to a special fund of the county, city, or town.

The amount diverted to the special fund shall be equal to the revenues generated by a 1/64 percent tax rate for the county, and the cities and towns within that county, and shall be used to repay bonds or pay lease payments for the sports or recreational facilities.

Municipal Energy Sales and Use Tax B Computation of Taxable Income
Senate Bill 167, effective May 1, 2000, clarifies the legislative intent that for purposes of calculating the municipal energy sales and use tax, delivered value does not include the municipal energy sales and use tax.

Sales and Use Tax Modifications
Senate Bill 172 provides that a vendor that does not have nexus with Utah (a "remote vendor"), and therefore no duty to collect Utah use tax:

 In addition, the legislation sets one use tax rate for remote vendors. This rate shall be equal to the sum of: (1) the state sales and use tax at a rate of 4.75 percent; (2) the local sales and use tax at a rate of 1 percent; and (3) if imposed by all counties, the county option tax at a rate of .25 percent. Counties, cities, and towns are prohibited from imposing any other sales and use taxes on a remote vendor. Since not all counties have imposed the county option tax at this time, the use tax rate for remote vendors is 5.75 percent.

Finally, Senate Bill 172 states that local use tax revenues collected by remote vendors shall be distributed to counties, cities, and towns on the basis of population. Beginning in fiscal 2002-2003, local use tax revenues collected by remote vendors that are in excess of the local use tax revenues collected by remote vendors in the fiscal year ending June 30, 2001 shall be deposited into a restricted account. The remainder of the local use tax revenues collected by remote vendors shall be distributed to counties, cities, and towns on the basis of population.

The provisions of Senate Bill 172 are effective beginning July 1, 2001.

Sales and Use Taxes B Notice and Effective Date
Senate Bill 209 provides that if a county, city, or town enacts or repeals a local sales tax, or changes the rate of a local sales tax, the enactment, repeal, or change in the rate shall take effect on the first day of a calendar quarter 75 days after the county, city, or town provides notice of the enactment, repeal, or change in rate to the Tax Commission.

Similarly, if an annexation results in a change in the rate of a local sales tax for an annexed area, the change shall take effect on the first day of a calendar quarter 75 days after the annexing county provides notice of the annexation to the Tax Commission.

The provisions of Senate Bill 209 are effective beginning May 1, 2000.

To ask questions regarding this Tax Bulletin, please call Taxpayer Services at (801) 297-2200 or call toll free 1-800-662-4335. To submit questions in writing, mail to Taxpayer Services, 210 North 1950 West, Salt Lake City, UT 84134, or email taxmaster@tax.state.ut.us. Those who have impaired hearing may call the Telecommunications Device for the Deaf (TDD) at (801) 297-2020.