Richard Cheatum — Asked for clarification about whether the tax policy raises the state's cost for the same project.
Richard Cheatum — His question is being answered regarding contractor use tax and sales tax liability.
Richard Cheatum — The discussion continues in response to his clarification questions about who owes tax on materials.
Richard Cheatum — Asked who ultimately pays the contractor and the sales tax bill.
Richard Cheatum — Mr. Johnson responds directly to his question.
Richard Cheatum — Indicates he has a related question prompted by the discussion.
Richard Cheatum — Asked whether the committee has data on sales tax revenue from yard sales.
Richard Cheatum — Asked for clarification about whether the rules review occurs every eight years.
Richard Cheatum — Was addressed by Mr. Johnson in response to the question.
Richard Cheatum — Referenced again as the person asking the follow-up question.
Richard Cheatum — Addressed by Mr. Johnson regarding the updated eight-year review schedule.
Richard Cheatum — Addressed by Mr. Johnson in the explanation of the rule review schedule.
Richard Cheatum — Questioned whether rules can only be changed after the eight-year cycle and asked for a definition of emergency.
Richard Cheatum — Addressed by Mr. Johnson in the follow-up exchange.
Richard Cheatum — Referenced again as the member asking the follow-up question.
Richard Cheatum — Mr. Johnson responded directly to Representative Barbieri's question about rule changes.
Richard Cheatum — Mr. Johnson and the chair referenced Representative Barbieri's question.
Richard Cheatum — Aaron Yost responded to Representative Barbieri's question about emergency rules.
Richard Cheatum — Asked the follow-up question about emergency rule changes.
Richard Cheatum — Stated disagreement with the interpretation of the statute and asked whether rules cannot be renewed except in an emergency.
Richard Cheatum — Yost responded to Representative Barbieri's question about what qualifies as an emergency.
Richard Cheatum — Asked whether the proposed changes would reduce state revenue and apologized for being late.
Richard Cheatum — The chair addressed Representative Birch before he asked his question.
Richard Cheatum — Mr. Johnson answered Representative Birch's question about revenue impact.
Richard Cheatum — Clarified that he meant to ask about a change in state revenue and said his understanding was confirmed.
Richard Cheatum — Representative Cheatham is identified as the sponsor of an RS and House Bill 551 for Thursday's agenda.
Kyle Harris — Is asked to present the rules dockets as Vice Chair.
Kyle Harris — Noted that yard sale issues may need clarification and reminded the committee that legislation trumps rules.
Vito Barbieri — Requests a more specific reference to the item being discussed.
Vito Barbieri — Representative Barbieri is addressed by the chair and then asks Mr. Johnson to elaborate on his earlier statement that forms could not be eliminated for eight years, returning the discussion to that point.
Philip Johnson — Identifies the correct term as 'Realty' and says the change is not substantive.
Jeff Ehlers — Representative Ehlers asks for clarification on whether removing the term 'computer software' changes its taxability or whether that concept is covered elsewhere in the definition. He then follows up by asking whether 'computer software' has simply been renamed 'canned software,' and whether the two terms refer to the same thing.
Heather Scott — Representative Ehlers asked a series of follow-up questions about whether the rule changes were creating new taxable categories or simply clarifying existing policy. He first asked whether "canned software" and "computer software" were the same, then whether adding cloud storage made it newly taxable or merely clarified existing treatment. He next asked about the addition of short-term rentals alongside hotels, motels, and campgrounds, whether that imposed a new tax, and then raised a question about yard sales and whether the language meant sales tax would now have to be collected in those situations. Finally, he shifted to the ST-101 sales tax exemption certificate, asking why language was being struck, whether the certificate was being changed or eliminated, and how many other forms referenced in the rules would still require rulemaking if altered.
Mr. Johnson — Explained that canned software is software that is not changed or purchased as a...
Mr. Johnson — Explained that there is a difference between canned software and software that is manipulated and used for their own purposes.
Mr. Johnson — Said the addition was for clarification and that storing digital data on a cloud instead of a physical device is not taxable because it is not physical.
Mr. Johnson — Explained that cloud storage is not taxable because it is not physical.
Mr. Johnson — Said short-term rentals and vacation rentals have always been subject to sales tax and traveling convention, and are not subject to local option taxes.
Mr. Johnson — Continued explaining that short-term rentals and vacation rentals are subject to sales tax and not local option taxes.
Mr. Johnson — Said the yard sales language was moved, not changed, and explained the retailer threshold tied to more than two sales.
Mr. Johnson — Explained the yard sales provision was moved and that more than two sales can make someone a retailer.
Mr. Johnson — Explained that the forms were removed from the rule so future form changes would not require rule changes.
Mr. Johnson — Said forms were removed from the rule because rule changes are limited and would otherwise be needed whenever forms change.
Mr. Johnson — Said other form references were changed to the general term 'exemption certificate' and that forms are available on the Tax Commission website.
Mr. Johnson — Said other form references were generalized and that forms are available on the Tax Commission website.
Mr. Johnson — Explained that a retailer is anyone with two or more sales and that yard sales are limited to two per year under the occasional sales section.
Mr. Johnson — Explained that the contractor is liable for tax on materials for exempt projects and cannot use the entity’s exemption.
Mr. Johnson — Explained that contractors owe tax on materials for exempt projects and cannot use the entity’s exemption.
Mr. Johnson — The chair said Mr. Johnson would be brought back to answer questions.
Joe Palmer — Representative Monks was asked to yield and agreed, and shortly afterward the chair indicated that Representative Monks would take the discussion from there, continuing the same procedural exchange.