Utah has plans to expand its machinery and equipment exemption for sales tax if federal law gives states the ability to collect sales taxes from out-of-state online retailers. The federal law could come from Congress or the U.S. Supreme Court. Under the Utah legislation, the expanded manufacturing exemption would be effective once Utah has collected a minimum amount of sales tax revenue from remote sellers.
Property With an Economic Life of Less than Three Years
The exemption would apply to a purchase or lease of machinery, equipment, or normal operating repair or replacement parts that last less than three years. However, the items must be used in:
- a manufacturing process;
- scrap recycling;
- mining activities; or
- the operation of a web search portal.
A medical laboratory can also purchase property with an economic life of less than three years exempt from tax if it uses the property in its operations.
Ch. 472 (S.B. 233), Laws 2018, effective as noted above