Response
October 12, 1992
Letter
October
12, 1992
XXXXX
Tax
Consultant
Re:
Noncommercial Use of Fuels and Electricity
Dear
XXXXX:
Your
request for an advisory opinion regarding whether the term
"manufacturing" contained in rule R865-19-35S means those activities
which fall under SIC coded 2000 through 3999 has been referred to the Auditing
Division for their analysis. It is the division staff recommendation that:
1.
Although rule 35S does not contain a requirement that manufacturing activities
fall within the SIC codes 2000 to 3999, it is reasonable to conclude that if an
activity does fall within those SIC codes they are entitled to exemption from
sales tax on fuel and electricity providing the predominant use test is met.
2.
The activity of producing prepackaged software under SIC code 7372 is not
considered manufacturing or producing or compounding of a product which will be
resold. That activity is deemed to be a professional service.
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.
To
arrange for Americans with Disabilities Act accommodations, please contact the
Tax Commission at (801) 530-6920, (801) 530-6077 or TDD (801) 530-6269 allowing
three working days notice.
For
the Commission,
Joe
B. Pacheco
Commissioner
Joe
Pacheco, Commissioner
Utah
State Tax Commissioner
160
East 300 South
Salt
Lake City, Utah 84134
Re:
R865-19-35S
Dear
Commissioner,
The
above mentioned rule states in part the following:
B.
"Noncommercial consumption" is defined as fuel used in:
3.
use in manufacturing tangible personal property or use in producing or
compounding of a product which will be resold.
Does
the term "manufacturing" as used here mean those activities which
fall under the SIC codes 2000 thru 3999.
Does
the second part of paragraph 3 (or use in producing or compounding of a product
which will be resold) refer to products not referred to in SIC codes 2000 thru
3999 such as 'Prepackaged Software' under 7372.
Thank
you for your help in this matter.
Respectfully,
XXXXX