97-068
Response
November 18, 1997
Dear
Mrs. Rees
We would like a advisory opinion on the
following question. We are a non profit company owned by 155 shareholders who
are farmers. We do not pay any taxes. At the present time we are upgrading a
dam on the XXXXX river and have hired a individual to repair and upgrade it. Do we have to pay sales tax on the materials
he uses to complete the job?.
Sincerely
Yours,
NAME
Secretary
November
18, 1997
NAME
ADDRESS
CITY
STATE ZIP
Advisory
Opinion - Application of sales tax to purchases of materials used to repair and
upgrade a dam.
Dear
NAME,
We have received your request for
sales tax guidance pertaining to purchases of materials that will be used to
repair and upgrade a dam on the XXXX River.
Section 59-12-104 (21) of the Utah Code
exempts from sales tax items of tangible personal property that are used or
consumed primarily and directly in farming operations, including items that are
converted to real property by a farmer or contractor. The materials purchased to repair and upgrade the dam may be
purchased tax exempt if the dam is considered to be used primarily and directly
in farming operations. For instance, if
the dam is part of an irrigation system that primarily and directly serves
agricultural operations, the materials may be purchased tax free. If the dam serves purposes other than
agricultural purposes, our
determination will depend on the particular facts and circumstances of
its use.
We you have other questions, or if
you would like to provide additional information upon which we can base a more
specific opinion, please let us know.
For
the Commission,
Joe
B. Pacheco,
Commissioner
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