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Sales Tax State Activity Update - April 2006

Senate Bill Expands Utah Manufacturing Exemption

Utah Senate Bill 31, recently enacted by the Utah legislature, expands the exemption for purchases used to manufacture an item sold as tangible personal property. A summary of the changes follows:

• The definition of "industrial use" includes the use of natural gas, electricity, heat, coal, fuel oil, or other fuels in producing a form of energy or steam, as provided by 54-2-1(2)(a) Public Utilities, by a cogeneration facility as defined by 54-2-1 Public Utilities.
• The definition of "manufacturing facility" includes a cogeneration facility as defined by 54-2-1 Public Utilities.
• The exemption for machinery and equipment purchased for use in a manufacturing facility is no longer limited to only that manufacturing equipment used in "new or expanding operations".
• The exemption for repair or replacement parts for manufacturing equipment is no longer limited to only those parts that "extend the normal estimated useful life of existing machines".
• A scrap recycler may qualify for the manufacturing exemption provided certain qualifications are met.

The full text may be viewed Utah State Legislature website.

(Utah Legislature, Senate Bill 31, Session Law Chapter 220)

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