92-023
June
30, 1992
XXXXX
Re:
Third Party Drop Shipments
This
letter is in response to your recent request for a Tax Commission ruling on
what is required to satisfy the sales and use tax laws on third party drop
shipment sales by an out of state distributor.
The
Tax Commission policy is to refer such requests to the division most qualified
to analyze the request and make recommendations concerning it. As such, your
request was referred to the Tax Commission's Auditing Division for their
analysis and recommendation. The division's recommendation is as follows:
A
seller making a sale to his "resale" customer who is licensed only in
his home state and does not have nexus in Utah, but is drop shipping to a third
party in Utah, is required to have a sales tax exemption certificate signed by
the "resale" customer containing his home state's resale number. The
third party is responsible to pay use tax directly to the Tax Commission.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendation. Obviously, if there are deviations from these facts,
this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah State Supreme Court. A
Notice of Appeal Rights and a copy of the Utah Taxpayer Bill of Rights are
attached.
For
the Commission,
Joe
B . Pacheco
Commissioner
State
Tax Commission
Auditing
Division
160
E. 400 South
Salt
Lake City, UT 84134
Attention:
Sales & Use Tax Department
We
require clarification from your State on the following situation:
Our
customer operates a business as a dealer and/or distributor, who buys for
resale only and has a Tax Exempt Certificate in his home State.
He
has requested that we invoice him and then DROP SHIP air conditioners to his
customer in your State.
Is
he required to provide us with:
A)
nothing
B)
a copy of his customer's Tax Exempt Certificate
C)
a tax exempt certificate from your State in his company name
Please
provide a written opinion so that we are sure to comply with the Sales Tax Laws
of your State.
Sincerely,
XXXXX
Accountant
92-024DJ
Response
July 10, 1992
July
10, 1992
XXXXX
Re:
Qualifying Purchases, Pollution Control Facility
Dear
XXXXX:
This
letter is in response to your recent request for an advisory opinion on what
constitutes "qualifying purchases" for use in a certified pollution
control facility.
The
Tax Commission policy is to refer such requests to the division most qualified
to analyze the request and make recommendations concerning it. As such, your
request was referred to the Tax Commission's Auditing Division for their
analysis and recommendations. The division's recommendations are as follows:
1.
Qualifying purchases are all purchases of pollution control equipment which
have been certified by the Division of Air Quality. Replacement equipment and
parts to repair certified pollution control equipment qualify for the
exemption.
2.
Consumable supplies, chemicals and cleaning materials do not qualify for sales
or use tax exemption. Filtration equipment or supplies qualify only if they are
reusable. Soda ash used to neutralize acidic gases is a consumable supply and
does not qualify for exemption.
3.
Sales Tax Rule R865-19-35S provides an exemption for fuels and electricity for
use in agriculture, manufacturing and mining.
XXXXX is not a manufacturer; therefore, the purchase of power to run
pollution control equipment is taxable.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendations. Obviously, if there are deviations from these
facts, this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah State Supreme Court. A
Notice of Appeal Rights and a copy of the Utah Taxpayer Bill of Rights are
attached.
For
the Commission
Joe
B. Pacheco
Commissioner
Utah
State Tax Commission
160
East 3rd South
Salt
Lake City, UT 84134
RE:
Request Advisory Opinion On "Qualified Purchases"
XXXXX
is a hazardous waste incineration facility. The plant is located in XXXXX
County, about fifty miles east of XXXXX. On XXXXX, 1992 the site received its
certification for "Sales and/or Use Tax Exemption for Pollution Control
Facility". The Certificate was received from the Utah Division of Air
Quality for selected parts of the plant.
The
Utah Administrative Code R865-19-83S, paragraph 1A states, "After the
facility is certified, qualifying purchases should be made without paying tax
by providing an exemption certificate to the vendor." Please clarify what
is a "qualifying purchase?"
Does
a "qualifying purchase" include equipment replacements and materials
required to operate and maintain equipment that the Division of Air Quality has
certified? Examples include: replacement pumps and spray nozzles for the spray
dryer (used to cool down gases before cleaning and discharge), filtration
equipment for the baghouse, soda ash (used to neutralize acidic gases) and the
cost of power to run the pollution control equipment.
I
have discussed this question with the Division of Air Quality and various
individuals within the State Tax Commission. There is a difference of opinion
about what the intent and scope of the "qualified purchase" clause
refers to once the facility has been certified. Clarification of this would be
most helpful.
Sincerely,
XXXXX
Controller