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2006 General Session – H.B. 109, Sales and Use Tax, Food and Food Ingredients
2006 Third Special Session – H.B. 3004, Sales and Use Tax Relating to Food
2007 General Session – H.B. 27, Sales and Use Tax Modifications
During 2006, the Utah Legislature passed legislation (H.B. 109 and H.B. 3004) to reduce the state sales and use tax rate on food and food ingredients from 4.75 percent to 2.75 percent. The reduction is effective January 1, 2007.
The adopted legislation appropriated funds to partially reimburse qualified business locations for computer hardware, software, and programming costs incurred to comply with the reduced sales and use tax rate. In accordance with legislation, the Tax Commission will disburse the funds.
In the 2007 General Session, the legislature amended the reimbursement in H.B. 27 to allow in-house programing costs and to extend the time to March 31, 2007.
A business location or outlet must have remitted sales and use tax during 2005 (specific remittance amounts in Rebate Claim Process) and remitted sales and use tax on food and food ingredients before March 1, 2006. If the business location/outlet meets these criteria, it may qualify for a rebate of certain expenses.
The only expenses eligible for rebate are computer software, hardware and programming purchases made to comply with the reduced state sales tax rate on food and food ingredients. The applicable expenses must occur after May 1, 2006 and by December 31, 2006.
One rebate distribution will be made to eligible claimants based on the following criteria.
For rebate claim eligibility during the First Claims Review, the business location/outlet must have remitted $15,000-$150,000 in sales and use tax for tax year 2005 and remitted sales and use tax on food and food ingredients before March 1, 2006. If the business location/outlet meets these criteria, it may qualify for a rebate. To the extent funds are available, the business location/outlet may be eligible for 75% of verifiable expenditures up to a maximum of $5,000.
Following the First Claims Review, if the total of all rebate claims postmarked on or before March 31, 2007:
For rebate claim eligibility, the business location/outlet must have remitted $150,000-$500,000 in sales and use tax for tax year 2005 and remitted sales and use tax on food and food ingredients before March 1, 2006. If the business location/outlet meets these criteria, it may qualify for a rebate. To the extent funds are available, the business location/outlet may be eligible for 50% of verifiable expenditures up to a maximum of $10,000.
Following a Second Claims Review, if the total of all rebate claims postmarked on or before March 31, 2007:
For rebate claim eligibility, the business location/outlet must have remitted $15,000-$500,000 in sales and use tax for tax year 2005 and remitted sales and use tax on food and food ingredients before March 1, 2006. If the business location/outlet meets these criteria, it may qualify for a rebate. Purchases that were not reimbursed in the first or second review may be eligible for 50% of verifiable expenditures.
If a business location/outlet remitted more than $500,000 in sales/use tax for 2005 and remitted sales/use tax on food and food ingredients before March 1, 2006, it may qualify for a rebate. To the extent funds are available, the business location/outlet may be eligible for 50% of verifiable expenditures.
Following a Third Claims Review, if the total of all rebate claims postmarked on or before March 31, 2007:
If all eligibility requirements have been met, a business location/outlet can submit a rebate request.
To request a rebate, the business location/outlet must complete and submit TC-61RCF, 2006 Rebate Claim Form, by U.S. mail to the Tax Commission. Each purchase submitted for rebate consideration must have supporting documentation. The rebate claim form and supporting documentation must be postmarked on or before March 31, 2007.
All rebate claim submittals will be analyzed for eligibility.
TC-61RCF, 2006 Rebate Claim Form.
See definitions for food and food ingredients and prepared food.
To qualify for this rebate, a business location or outlet must have a Utah sales tax license, remitted at least $15,000 in sales and use tax for tax year 2005, and remitted sales and use tax on food and food ingredients before March 1, 2006 to the Tax Commission. For a breakdown of the amount of sales and use tax remitted for tax year 2005, please see Rebate Claim Process.
A qualified business location can request a rebate for computer software, hardware and programming purchases that were made to comply with the reduced state sales tax rate on food and food ingredients. The applicable expenses must occur after May 1, 2006 and by December 31, 2006.
In-house programming is performed by an employee of the sales tax license holder. Purchased programming is performed by a vendor not employed by the sales tax license holder.
The 2006 legislation only allowed for reimbursement of verifiable amounts the business actually expended "to purchase computer hardware, software, or programming to account for sales under the reduced sales and use tax rate imposed on food and food ingredients..."
The 2007 legislation allowed in-house programming as a permitted expense.
All reimbursement requests must be postmarked on or before March 31, 2007.
After meeting eligibility criteria, each claimed expense must have supporting documentation. For computer software, hardware and purchased programming expenses, attach invoices or itemized receipts. For in-house programming expenses, attach documentation detailing payroll allocation (hourly rate including benefits) per programmer multiplied by the number of eligible programming hours to equal the total of in-house programming expenses claimed. The documentation must include dates the programming was performed and purpose of the programming.
Any business that qualifies to participate can submit a rebate claim for eligible expenses. The rebate is designed to reimburse each business location or outlet. If you have more than one location, you could be eligible for a rebate on each business location or outlet.
Rebate amounts will vary based on the amount of eligible expenses you incurred during stated timeframes and availability of rebate funds. If the total of all rebate claims exceeds appropriated funds, rebate claim amounts will be prorated among eligible claimants and prorated rebate checks will be mailed.
Rebate requests must be postmarked on or before March 31, 2007. Mail claim form and supporting documentation to:
Utah State Tax Commission
210 North 1950 West
Salt Lake City, UT 84134-7475
Page 2 is provided if you need additional lines to submit more than one invoice in a category (e.g., two invoices for software expenses) for a single location/outlet. You must use page 2 to provide this required information.
No. However, the signed rebate claim form and all supporting documentation may be scanned, saved to a CD and mailed to the Tax Commission.
Payment of eligible rebate claims is contingent upon the Tax Commission receiving complete, timely-filed claims with all supporting documentation. The Tax Commission must review, verify, analyze, track and tabulate all rebate claims before issuing rebates to any claimant. A one-time rebate distribution will be made to eligible claimants.
No. To be eligible for reimbursement the funds must have been expended after May 1, 2006 and on or before December 31, 2006.
No. A copy of the original vendor invoice billing the corporate office for the item must be submitted.
For additional information, call the Tax Commission at (801) 297-7705 or toll free at 1-800-662-4335 ext. 7705 or email to taxmaster@utah.gov.
Food and food ingredients are substances regardless of whether in liquid, concentrated, solid, frozen, dried, or dehydrated form; and that are sold for ingestion or chewing by humans and consumed for the substance's taste or nutritional value. Food and food ingredients do not include an alcoholic beverage, tobacco or prepared food.
Prepared food means food sold in a heated state or heated by a seller with two or more food ingredients mixed or combined by the seller for sale as a single item; or food sold with an eating utensil provided by the seller, including a plate, knife, fork, spoon, glass, cup, napkin, or straw.
Prepared food does not include:
An eating utensil provided by the seller does not include a container or packaging used to transport the food.