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H.B. 157

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7 LONG TITLE

8 General Description:

9 This bill amends provisions related to currency.

10 Highlighted Provisions:

11 This bill:

12 . exempts specie legal tender from the Pawnshop and Secondhand Merchandise

13 Transaction Information Act;

14 . addresses provisions related to specie legal tender, including:

15 . renaming the Legal Tender Act to the Specie Legal Tender Act;

16 . defining “specie legal tender” to mean gold or silver coin issued by the United

17 States or certain other gold or silver coin if authorized by a court of competent

18 jurisdiction or congress;

19 . providing that specie legal tender is legal tender in the state;

20 . providing that a person may not compel another person to tender or accept

21 specie legal tender except as expressly provided by contract;

22 . repealing obsolete language;

23 . requiring the attorney general to enforce the Specie Legal Tender Act; and

24 . providing a severability clause;

25 . addresses an income tax credit for certain capital gains on a transaction involving

26 legal tender;

27 . addresses a sales and use tax exemption for certain currency or coins;

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29 specie legal tender;

30 . addresses the construction of a statute or administrative rule involving legal tender;

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32 . makes technical and conforming changes.

33 Money Appropriated in this Bill:

34 None

35 Other Special Clauses:

36 This bill provides an effective date.

37 This bill provides for retrospective operation.

38 Utah Code Sections Affected:

39 AMENDS:

40 13-32a-103.5, as enacted by Laws of Utah 2009, Chapter 272

41 59-1-1501, as enacted by Laws of Utah 2011, Chapter 302

42 59-1-1502, as enacted by Laws of Utah 2011, Chapter 302

43 59-1-1503, as enacted by Laws of Utah 2011, Chapter 302

44 59-10-1028, as enacted by Laws of Utah 2011, Chapter 302

45 59-12-104, as last amended by Laws of Utah 2011, Chapters 288, 314, 370, and 391

46 59-12-107, as last amended by Laws of Utah 2009, Chapter 212

47 ENACTS:

48 59-1-1501.1, Utah Code Annotated 1953

49 59-1-1505, Utah Code Annotated 1953

50 59-1-1506, Utah Code Annotated 1953

51 63G-3-801, Utah Code Annotated 1953

52 63G-3-802, Utah Code Annotated 1953

53 68-3-15, Utah Code Annotated 1953

54 REPEALS:

55 59-1-1504, as enacted by Laws of Utah 2011, Chapter 302

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57 Be it enacted by the Legislature of the state of Utah:

58 Section 1. Section 13-32a-103.5 is amended to read:

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60 chapter.

61 (1) This chapter applies to coin dealers, except:

62 (a) where provisions otherwise specifically address coin dealers[.]; or

63 (b) as provided in Subsection (2).

64 (2) Specie legal tender as defined in Section 59-1-1501.1 that is used as legal tender is

65 exempt from this chapter.

66 Section 2. Section 59-1-1501 is amended to read:

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68 59-1-1501. Title.

69 This part is known as the “Specie Legal Tender Act.”

70 Section 3. Section 59-1-1501.1 is enacted to read:

71 59-1-1501.1. Definitions.

72 Subject to Subsection 59-1-1502 (3), as used in this part, “specie legal tender” means

73 gold or silver coin that is issued by the United States.

74 Section 4. Section 59-1-1502 is amended to read:

75 59-1-1502. Specie legal tender is legal tender in the state — Person may not

76 compel another person to tender or accept specie legal tender — Court or congressional

77 action to authorize gold or silver coin or bullion as legal tender.

78 (1) [Gold and silver coin issued by the federal government] Specie legal tender is legal

79 tender in the state.

80 (2) [A] Except as expressly provided by contract, a person may not compel any other

81 person to tender or accept [gold and silver coin that is issued by the federal government] specie

82 legal tender.

83 (3) Gold or silver coin or bullion, other than gold or silver coin that is issued by the

84 United States, is considered to be specie legal tender and is legal tender in the state if:

85 (a) a court of competent jurisdiction issues a final, unappealable judgment or order

86 determining that the state may recognize the gold or silver coin or bullion, other than gold or

87 silver coin that is issued by the United States, as legal tender in the state; or

88 (b) congress enacts legislation that:

89 (i) expressly provides that the gold or silver coin or bullion, other than gold or silver

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91 (ii) expressly allows the state to recognize the gold or silver coin or bullion, other than

92 gold or silver coin that is issued by the United States, as legal tender in the state.

93 Section 5. Section 59-1-1503 is amended to read:

94 59-1-1503. Nonrefundable credit — Sales and use tax exemption — Sales and use

95 tax remittance.

96 [(1) There is a nonrefundable credit established for any capital gains incurred from the

97 exchange of gold and silver coin issued by the federal government for another form of legal

98 tender as provided in Section 59-10-1028 .]

99 (1) A nonrefundable individual income tax credit is allowed as provided in Section

100 59-10-1028 related to a capital gain on a transaction involving the exchange of one form of

101 legal tender for another form of legal tender.

102 (2) [The exchange of gold and silver coin issued by the federal government for another

103 form of legal tender is] Sales of currency or coin are exempt from sales and use taxes as

104 provided in Subsection 59-12-104 (50).

105 (3) The remittance of a sales and use tax on a transaction involving specie legal tender

106 is as provided in Section 59-12-107 .

107 Section 6. Section 59-1-1505 is enacted to read:

108 59-1-1505. Attorney general to enforce part.

109 The attorney general shall enforce this part.

110 Section 7. Section 59-1-1506 is enacted to read:

111 59-1-1506. Severability clause.

112 If any provision of this part or the application of any provision to any person or

113 circumstance is held invalid by a final decision of a court of competent jurisdiction, the

114 remainder of this part shall be given effect without the invalid provision or application. The

115 provisions of this part are severable.

116 Section 8. Section 59-10-1028 is amended to read:

117 59-10-1028. Nonrefundable tax credit for capital gain transactions on the

118 exchange of one form of legal tender for another form of legal tender.

119 (1) As used in this section:

120 (a) “Capital gain transaction” means a transaction that results in a:

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122 (ii) long-term capital gain.

123 (b) “Long-term capital gain” is as defined in Section 1222, Internal Revenue Code.

124 (c) “Long-term capital loss” is as defined in Section 1222, Internal Revenue Code.

125 (d) “Net capital gain” means the amount by which the sum of long-term capital gains

126 and short-term capital gains on a claimant’s, estate’s, or trust’s transactions from exchanges

127 made for a taxable year of one form of legal tender for another form of legal tender exceeds the

128 sum of long-term capital losses and short-term capital losses on those transactions for that

129 taxable year.

130 (e) “Short-term capital loss” is as defined in Section 1222, Internal Revenue Code.

131 [(c)] (f) “Short-term capital gain” is as defined in Section 1222, Internal Revenue Code.

132 (2) Except as provided in Section 59-10-1002.2 , for taxable years beginning on or after

133 January 1, 2012, a claimant, estate, or trust may claim a nonrefundable tax credit equal to the

134 product of:

135 (a) [to the extent a capital gain is not offset by a capital loss under Chapter 1,

136 Subchapter P, Capital Gains and Losses, Internal Revenue Code, the total] to the extent a net

137 capital gain is included in taxable income, the amount of the claimant’s, estate’s, or trust’s

138 [short-term capital gain or long-term] net capital gain on [a] capital gain [transaction]

139 transactions from [an exchange] exchanges made on or after January 1, 2012, [of gold or silver

140 coin issued by the federal government] for a taxable year, of one form of legal tender for

141 another form of legal tender; and

142 (b) 5%.

143 (3) A claimant, estate, or trust may not carry forward or carry back a tax credit under

144 this section.

145 (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

146 commission may make rules to implement this section.

147 Section 9. Section 59-12-104 is amended to read:

148 59-12-104. Exemptions.

149 The following sales and uses are exempt from the taxes imposed by this chapter:

150 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax

151 under Chapter 13, Motor and Special Fuel Tax Act;

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153 subdivisions; however, this exemption does not apply to sales of:

154 (a) construction materials except:

155 (i) construction materials purchased by or on behalf of institutions of the public

156 education system as defined in Utah Constitution Article X, Section 2, provided the

157 construction materials are clearly identified and segregated and installed or converted to real

158 property which is owned by institutions of the public education system; and

159 (ii) construction materials purchased by the state, its institutions, or its political

160 subdivisions which are installed or converted to real property by employees of the state, its

161 institutions, or its political subdivisions; or

162 (b) tangible personal property in connection with the construction, operation,

163 maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities

164 providing additional project capacity, as defined in Section 11-13-103 ;

165 (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:

166 (i) the proceeds of each sale do not exceed $1; and

167 (ii) the seller or operator of the vending machine reports an amount equal to 150% of

168 the cost of the item described in Subsection (3)(b) as goods consumed; and

169 (b) Subsection (3)(a) applies to:

170 (i) food and food ingredients; or

171 (ii) prepared food;

172 (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:

173 (i) alcoholic beverages;

174 (ii) food and food ingredients; or

175 (iii) prepared food;

176 (b) sales of tangible personal property or a product transferred electronically:

177 (i) to a passenger;

178 (ii) by a commercial airline carrier; and

179 (iii) during a flight for in-flight consumption or in-flight use by the passenger; or

180 (c) services related to Subsection (4)(a) or (b);

181 (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts

182 and equipment:

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184 North American Industry Classification System of the federal Executive Office of the

185 President, Office of Management and Budget; and

186 (II) for:

187 (Aa) installation in an aircraft, including services relating to the installation of parts or

188 equipment in the aircraft;

189 (Bb) renovation of an aircraft; or

190 (Cc) repair of an aircraft; or

191 (B) for installation in an aircraft operated by a common carrier in interstate or foreign

192 commerce; or

193 (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an

194 aircraft operated by a common carrier in interstate or foreign commerce; and

195 (b) notwithstanding the time period of Subsection 59-1-1410 (8) for filing for a refund,

196 a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a

197 refund:

198 (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;

199 (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;

200 (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for

201 the sale prior to filing for the refund;

202 (iv) for sales and use taxes paid under this chapter on the sale;

203 (v) in accordance with Section 59-1-1410 ; and

204 (vi) subject to any extension allowed for filing for a refund under Section 59-1-1410 , if

205 the person files for the refund on or before September 30, 2011;

206 (6) sales of commercials, motion picture films, prerecorded audio program tapes or

207 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture

208 exhibitor, distributor, or commercial television or radio broadcaster;

209 (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal

210 property if the cleaning or washing of the tangible personal property is not assisted cleaning or

211 washing of tangible personal property;

212 (b) if a seller that sells at the same business location assisted cleaning or washing of

213 tangible personal property and cleaning or washing of tangible personal property that is not

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215 Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning

216 or washing of the tangible personal property; and

217 (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,

218 Utah Administrative Rulemaking Act, the commission may make rules:

219 (i) governing the circumstances under which sales are at the same business location;

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221 (ii) establishing the procedures and requirements for a seller to separately account for

222 sales of assisted cleaning or washing of tangible personal property;

223 (8) sales made to or by religious or charitable institutions in the conduct of their regular

224 religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are

225 fulfilled;

226 (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of

227 this state if the vehicle is:

228 (a) not registered in this state; and

229 (b) (i) not used in this state; or

230 (ii) used in this state:

231 (A) if the vehicle is not used to conduct business, for a time period that does not

232 exceed the longer of:

233 (I) 30 days in any calendar year; or