96-172
Responses
December 6, 1996, December 19, 1996 and January 13, 1997
Request
State
of Utah
Utah
State Tax Commission
210
North 1950 West
Salt
Lake City, UT 84134
Attn:
XXXXX
Re: Sales/use tax advisory opinion for catalyst
at an approved pollution control facility
XXXXX
Corporation has an approved pollution control facility at our Lisbon
plant. We understand that purchases for
replacement parts and repairs are exempt sales tax, while consumable items are
not.
In
general, we consider consumables to be low cost/frequently expended items (such
as filters). Conversely, we consider
high cost/not so frequently expended items to be repair/replacement. We must purchase and replace a catalyst
chemical depending on its ability to cause a reaction in the pollution control
process every 10-16 months. The cost to
replace is over $$$$$. In your opinion, would the state of Utah
consider this catalyst purchase, replacement/repair or a consumable.
Please
send your response to the following address:
XXXXX
Thank
you for your assistance in this matter.
Sincerely,
XXXXX
NAME
ADDRESS
CITY,
STATE, ZIP
Advisory
Opinion - Application of sales tax to purchases of equipment for a pollution
control facility.
Dear
XXXXX,
We have received your request for sales
tax guidance pertaining to purchases of equipment for a pollution control
facility. We offer the following:
All materials and equipment
purchased, leased or installed in a certified pollution control facility are
exempt from sales and use tax. Utah
Code Ann. §§ 19-2-123 and 59-12-104 (12).
Certification is obtained from the Utah Air Quality Board.
We interpret the statute to include
all repair and replacement parts.
Lubricants, solvents or liquids are not considered repair or replacement
parts.
Please let us know if you have other
questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner
NAME
ADDRESS
CITY,
STATE, ZIP
Re:
Advisory Opinion issued December 6, 1996.
Dear
XXXXX,
Our Auditing Division asked us to
review the opinion issued to COMPANY on December 6, 1996. We have determined that the chemical
catalyst and other items referred to in that opinion may or may not qualify for
sales tax exemption, depending upon the circumstances. We are withdrawing that opinion and setting
this issue for further study.
We intend to review our exemption
approval process and the role that the Department of Environmental Quality will
play in that process. In the end, we
can give you and our Auditing Division clearer guidance on this issue.
We expect to issue you a new
advisory opinion in January. We
apologize for the delay, but we feel this review process is important. Let us know if you have questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner
NAME
ADDRESS
CITY,
STATE, ZIP
RE: Certification of sales tax exemption on
chemical catalyst
Dear
XXXXX,
In our letter of December 19, 1996 we
notified you that we withdrew our initial advisory opinion dated December 6,
1996. We have since learned that
COMPANY is scheduled for an audit this spring.
We do not issue advisory opinions on matters that are the subject of an
audit because those matters may come before us later on appeal.
As general background information,
the Department of Environmental Quality (DEQ) has the responsibility for certifying pollution control equipment for
purposes of the sales tax exemption.
Our auditors will rely on DEQ’s assistance to identify exempt purchases
during the audit period.
If your company is dissatisfied with
an audit assessment, it may challenge the assessment through our appeals
process. An explanation of your appeal
rights will be included in the audit assessment report.
We apologize for any confusion
resulting from our first letter.
For
the Commission,
Joe
B. Pacheco,
Commissioner