94-029
Response
December 1, 1994
Request
Dear XXXXX:
Thank you for your
call. I enjoyed talking to you and
getting an update on the ski industry.
It is going to be a great year.
You had asked me to
look into the fuel tax exemption for off-highway use and determine if that
exemption could apply to fuel used for off-highway purposes at a ski
resort. You had also asked me to
examine the exemption for electricity used for agriculture and determine if the
ski industry might qualify for the exemption as well. I have done the research and report to you the following
conclusions:
1)
The off-highway fuel tax exemption is found in §59-13-301(2)(a) which
reads:
(2)
No tax is imposed upon special fuel which:
(a) is sold or used for any purpose other
than to operate or propel a motor vehicle upon the public highways of the
state, but this exemption applies only in those cases where the purchasers or
the users of special fuel establish to the satisfaction of the commission that
the special fuel was used for purposes other than to operate a motor vehicle
upon the public highways of the state;
This exemption
eliminates the 19 cents per gallon tax that is charged for vehicles used on the
highways. This exemption should apply
to special fuel purchased and used in ski lift engines and snow cats. However, §59-12-104(1) and §59-12-103(1)(c)
and (d) requires that the standard sales tax apply to fuel that is exempt from
§59-13-310(2)(a). The text of
§59-12-104(1) reads:
The following sales and uses are exempt
from the taxes imposed by this chapter:
(1) sales of aviation fuel, motor fuel,
and special fuel subject to a Utah state excise tax under Title 59, Chapter 13,
Motor and Special Fuel Tax Act;
The text of
§59-12-103(1)(c) and (d) reads:
There is levied a tax on the purchaser for
the amount paid or charged for the following:
(c)gas, electricity, heat, coal, fuel oil,
or other fuels sold or furnished for residential use;
(d) gas, electricity, heat, coal, fuel
oil, or other fuels sold or furnished for residential use;
The agricultural
industry has a specific exemption in §59-13-202 from the motor fuel tax on
gasolines. The text of the statute
reads:
(1) Any person who purchases and uses any
motor fuel within the state for the purposes of operating or propelling
stationary farm engines and self-propelled farm machinery used for non-highway
agricultural uses, and who has paid the tax on the motor fuel as provided by
this part, is entitled to a refund of the tax subject of the conditions and
limitations provided under this part.
It is apparent that
the ski industry is only subject to the 6.125 per cent sales tax and not to the
19 cents per gallon fuel excise tax.
There would need to be a statute change specifically exempting the ski
grooming and ski lift operations from the sales tax, as has been done for the
agricultural industry.
(2) With respect to
the agricultural exemption for diesel fuel and electricity, this exemption is
referenced in §59-12-10 (21). The text
to the exemption follows:
The following sales and uses are exempt
from the taxes imposed by this chapter....
(21) Sales of tangible personal property
used or consumed primarily and directly in farming operations, including sales
of irrigation equipment and supplies used for agricultural production purposes,
whether or not installed by farmer, contractor, or subcontractor, but not sales
of:
(a) machinery, equipment, materials, and
supplies used in manner that is incidental to farming, such as hand tools with
a unit purchase price not
in excess of $100, and
maintenance and janitorial equipment and supplies.
(b) tangible personal property used in any
activities other than farming, such as office equipment and supplies, equipment
and supplies used in sales or distribution of farm product, in research, or in
transportation; or any vehicle required to be registered by the laws of this
state, without regard to the use to which the vehicle is put;
Tangible personal
property used in the above mentioned statute would include electricity and
diesel fuel.
Based on the above
mentioned statutes, it is my opinion that the ski industry would not be entitled
to an exemption for diesel fuel or electricity used for snow making or other
skiing related purposed.
To be eligible for the
exemptions that the agricultural industry enjoys, the legislature would need to
affirmatively act on the issues and include specific exemptions in the
statutes.
Again, it was great to
visit with you. If I can be of further
assistance on this or other issues please let me know.
Sincerely,
W. Val Oveson
Chairman