99-002

Response February 10, 1999

REQUEST LETTER

December 16, 1998

Dear Sir or Madam:

This inquiry concerns the legal acceptability of Sales and Use Tax Exemption Certificates stored as scanned images on electronic media.

I would appreciate you forwarding me a written ruling, with respect to Utah's regulations, on the following two points:

1. Does the storage of a certificate or related relevant documents, as an electronic image, able to be reproduced on demand in printed form, meet your State's requirements for certificate retention.

2. In the event of any audit proceedings, does the presentation of a printed reproduction of a scanned certificate comply with a request by an official of your department that a company produce a certificate.

I thank you for your assistance and look forward to a prompt reply.

Respectfully,

NAME

TITLE

RESPONSE LETTER

February 10, 1999

RE: Advisory Opinion - Exemption Certificates

Dear NAME,

We have received your request for an advisory opinion concerning the storage of exemption certificates in an electronic format. The Commission has addressed this issue before as follows.

A person making a tax-exempt purchase must sign an exemption certificate. We have published a standardized exemption certificate form, the TC-721, for use by all taxpayers claiming an exemption. The vendor may also design an exemption certificate to reside in a database in an electronic format so long as it contains essentially the same information as the Tax Commission form and includes the purchaser=s signature.

After you have scanned the form for electronic filing, you need not keep the original hard copy on file. However, you must be able to reproduce the electronic copy in readable form in the event of an audit. Presentation of a printed reproduction of a scanned exemption certificate that contains the information indicated above will suffice in the event of an audit by the Commission.

Please contact us if you have any other questions.

For the Commission,

Joe B. Pacheco, CPA

Commissioner