SB 289

02-11 13:15  S.B. 289
1Local Sales Tax Distribution Amendments
                                       2026 GENERAL SESSION
                                             STATE OF UTAH
                                      Chief Sponsor: Nate Blouin
                                               House Sponsor:
2
3   LONG TITLE
4   General Description:
5This bill addresses the distribution of local sales tax revenue.
6   Highlighted Provisions:
7This bill:
8▸ provides for the total distribution of local sales tax revenue on the basis of transaction
9   location; and
10▸ makes technical and conforming changes.
11   Money Appropriated in this Bill:
12None
13   Other Special Clauses:
14This bill provides a special effective date.
15   Utah Code Sections Affected:
16   AMENDS:
1759-12-205, as last amended by Laws of Utah 2025, Chapters 490, 495
18
19   Be it enacted by the Legislature of the state of Utah:
20Section 1. Section 59-12-205 is amended to read:
2159-12-205 . Ordinances to conform with statutory amendments -- Distribution of
22   tax revenue -- Determination of population.
23   (1) To maintain in effect sales and use tax ordinances adopted [pursuant to] in accordance
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24with Section 59-12-204, a county, city, or town shall adopt amendments to the county's,
25city's, or town's sales and use tax ordinances:
26(a) within 30 days of the day on which the state makes an amendment to an applicable
27provision of Part 1, Tax Collection; and
28(b) as required to conform to the amendments to Part 1, Tax Collection.
29   (2)[(a) Except as provided in Subsections (3), (4), and (5) and subject to Subsection (6):]
30[(i) 50% of each dollar collected from the sales and use tax authorized by this part
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31shall be distributed to each county, city, and town on the basis of the percentage
32that the population of the county, city, or town bears to the total population of all
33counties, cities, and towns in the state; and]
34     [(ii)] (a)[(A)] (i) [except] Except as provided in Subsections [(2)(a)(ii)(B), (C), (D),
35(E), and (F)] (2)(a)(ii) through (vi), (3), (4), and (5), and subject to Subsection (6), [
3650%] 100% of each dollar collected from the sales and use tax authorized by this
37part shall be distributed to each county, city, and town on the basis of the location
38of the transaction as determined under Sections 59-12-211 through 59-12-215;
39[(B)] (ii) except as provided in Subsections (10) through (13), 50% of each dollar
40collected from the sales and use tax authorized by this part within a project area
41described in a project area plan adopted by the military installation development
42authority under Title 63H, Chapter 1, Military Installation Development Authority
43Act, shall be distributed to the military installation development authority created
44in Section 63H-1-201;
45[(C)] (iii) except as provided in Subsections (10) through (13), beginning July 1,
462024, 20% of each dollar collected from the sales and use tax authorized by this
47part within a project area under Title 11, Chapter 58, Utah Inland Port Authority
48Act, shall be distributed to the Utah Inland Port Authority, created in Section
4911-58-201;
50[(D)] (iv) except as provided in Subsections (10) through (13), 50% of each dollar
51collected from the sales and use tax authorized by this part within the lake
52authority boundary, as defined in Section 11-65-101, shall be distributed to the
53Utah Lake Authority, created in Section 11-65-201, beginning the next full
54calendar quarter following the creation of the Utah Lake Authority;[ and]
55[(E)] (v) except as provided in Subsections (10) through (13), beginning January 1,
562026, 50% of each dollar collected from the sales and use tax authorized by this
57part within the boundary of an eligible basic special district, as that term is defined
58in Section 17B-1-1405, and if applicable, the boundary of a public infrastructure
59district created by the eligible basic special district, shall be distributed to the
60eligible basic special district[.] ; and
61[(F)] (vi) except as provided in Subsections (10) through (13), beginning the first day
62of a calendar quarter after the sales and use tax boundary for a major sporting
63event venue zone is established, the commission, at least annually, shall transfer
64an amount equal to 50% of the sales and use tax increment, as defined in Section
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6563N-3-1701, from the sales and use tax imposed under this part on transactions
66occurring within a sales and use tax boundary, as defined in Section 63N-3-1710,
67to the creating entity of the major sporting event venue zone.
68(b) Subsection [(2)(a)(ii)(C)] (2)(a)(iii) does not apply to sales and use tax revenue
69collected before July 1, 2022.
70   (3) Beginning no sooner than January 1, 2026, and before application of Subsections (2), (4),
71(5), and (6), and except as provided in Subsections (8) and (9), and as described in
72Section 63N-3-610.1, beginning the first day of a calendar quarter after the year set in
73the proposal and after the sales and use tax boundary for a convention center
74reinvestment zone is established under Title 63N, Chapter 3, Part 6, Housing and Transit
75Reinvestment Zone Act, the commission, at least annually, shall transfer an amount
76equal to 100% of the sales and use tax increment, as defined in Section 63N-3-602, from
77the sales and use tax imposed under this part on transactions occurring within an
78established sales and use tax boundary, as defined in Section 63N-3-602, to the entity
79specified in the convention center reinvestment zone proposal submitted [pursuant to] in
80accordance with Title 63N, Chapter 3, Part 6, Housing and Transit Reinvestment Zone
81Act.
82   (4)(a) As used in this Subsection (4):
83(i) "Eligible county, city, or town" means a county, city, or town that:
84(A) for fiscal year 2012-13, received a tax revenue distribution under Subsection
85(4)(b) equal to the amount described in Subsection (4)(b)(ii); and
86(B) does not impose a sales and use tax under Section 59-12-2103 on or before
87July 1, 2016.
88(ii) "Minimum tax revenue distribution" means the total amount of tax revenue
89distributions an eligible county, city, or town received from a tax imposed in
90accordance with this part for fiscal year 2004-05.
91(b) An eligible county, city, or town shall receive a tax revenue distribution for a tax
92imposed in accordance with this part equal to the greater of:
93(i) the payment required by Subsection (2); or
94(ii) the minimum tax revenue distribution.
95(c) For an eligible county, city, or town that qualifies to receive a distribution described
96in this Subsection (4), the commission shall apply the provisions of this Subsection
97(4) after the commission applies the provisions of Subsection (3).
98   (5)(a) For purposes of this Subsection (5):
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99(i) "Annual local contribution" means the lesser of $275,000 or an amount equal to
1002.55% of the participating local government's tax revenue distribution amount
101under Subsection (2)(a)(i) for the previous fiscal year.
102(ii) "Participating local government" means a county or municipality, as defined in
103Section 10-1-104, that is not an eligible municipality certified in accordance with
104Section 35A-16-404.
105      (b) For revenue collected from the tax authorized by this part that is distributed on or
106after January 1, 2019, the commission, before making a tax revenue distribution
107under Subsection (2)(a)(i) to a participating local government, shall:
108(i) adjust a participating local government's tax revenue distribution under Subsection
109(2)(a)(i) by:
110(A) subtracting an amount equal to one-twelfth of the annual local contribution for
111each participating local government from the participating local government's
112tax revenue distribution; and
113(B) if applicable, reducing the amount described in Subsection (5)(b)(i)(A) by an
114amount equal to one-twelfth of $250 for each bed that is available at all
115homeless shelters located within the boundaries of the participating local
116government, as reported to the commission by the Office of Homeless Services
117in accordance with Section 35A-16-405; and
118(ii) deposit the resulting amount described in Subsection (5)(b)(i) into the Homeless
119Shelter Cities Mitigation Restricted Account created in Section 35A-16-402.
120      (c) For a participating local government that qualifies to receive a distribution described
121in Subsection (4), the commission shall apply the provisions of this Subsection (5)
122after the commission applies the provisions of Subsections (3) and (4).
123  (6)(a) As used in this Subsection (6):
124(i) "Annual dedicated sand and gravel sales tax revenue" means an amount equal to
125the total revenue an establishment described in NAICS Code 327320, Ready-Mix
126Concrete Manufacturing, of the 2022 North American Industry Classification
127System of the federal Executive Office of the President, Office of Management
128and Budget, collects and remits under this part for a calendar year.
129(ii) "Sand and gravel" means sand, gravel, or a combination of sand and gravel.
130(iii) "Sand and gravel extraction site" means a pit, quarry, or deposit that:
131(A) contains sand and gravel; and
132(B) is assessed by the commission in accordance with Section 59-2-201.
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133(iv) "Ton" means a short ton of 2,000 pounds.
134(v) "Tonnage ratio" means the ratio of:
135(A) the total amount of sand and gravel, measured in tons, sold during a calendar
136year from all sand and gravel extraction sites located within a county, city, or
137town; to
138(B) the total amount of sand and gravel, measured in tons, sold during the same
139calendar year from sand and gravel extraction sites statewide.
140(b) For purposes of calculating the ratio described in Subsection (6)(a)(v), the
141commission shall:
142(i) use the gross sales data provided to the commission as part of the commission's
143property tax valuation process; and
144(ii) if a sand and gravel extraction site operates as a unit across municipal or county
145lines, apportion the reported tonnage among the counties, cities, or towns based on
146the percentage of the sand and gravel extraction site located in each county, city,
147or town, as approximated by the commission.
148(c)(i) Each July, the commission shall distribute from total collections under this part
149an amount equal to the annual dedicated sand and gravel sales tax revenue for the
150preceding calendar year to each county, city, or town in the same proportion as the
151county's, city's, or town's tonnage ratio for the preceding calendar year.
152(ii) The commission shall ensure that the revenue distributed under this Subsection
153(6)(c) is drawn from each jurisdiction's collections in proportion to the
154jurisdiction's share of total collections for the preceding 12-month period.
155(d) A county, city, or town shall use revenue described in Subsection (6)(c) for class B
156or class C roads.
157   (7)(a) Population figures for purposes of this section shall be based on, to the extent not
158otherwise required by federal law:
159(i) the most recent estimate from the Utah Population Committee created in Section
16063C-20-103; or
161(ii) if the Utah Population Committee estimate is not available for each municipality
162and unincorporated area, the adjusted sub-county population estimate provided by
163the Utah Population Committee in accordance with Section 63C-20-104.
164(b) The population of a county for purposes of this section shall be determined only
165from the unincorporated area of the county.
166   (8)(a) As used in Subsections (8) and (9):
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167(i) "Applicable percentage" means, for a convention center reinvestment zone created
168under Title 63N, Chapter 3, Part 6, Housing and Transit Reinvestment Zone Act,
169for sales occurring within the qualified development zone described in Subsection
170(8)(a)(ii), 100% of the sales and use tax increment, as that term is defined in
171Section 63N-3-602, from the sales and use tax:
172(A) imposed by a city of the first class in a county of the first class under this part;
173(B) imposed by a city of the first class in a county of the first class under Section
17459-12-402.1;
175(C) imposed by a county of the first class under Section 59-12-1102; and
176(D) imposed by a county of the first class under Part 22, Local Option Sales and
177Use Taxes for Transportation Act.
178(ii) "Qualified development zone" means the sales and use tax boundary of a
179convention center reinvestment zone created under Title 63N, Chapter 3, Part 6,
180Housing and Transit Reinvestment Zone Act.
181(iii) "Qualifying construction materials" means construction materials that are:
182(A) delivered to a delivery outlet within a qualified development zone; and
183(B) intended to be permanently attached to real property within the qualified
184development zone.
185      (b) For a sale of qualifying construction materials, the commission shall distribute the
186product calculated in Subsection (8)(c) to a qualified development zone if the seller
187of the construction materials:
188(i) establishes a delivery outlet with the commission within the qualified development
189zone;
190(ii) reports the sales of the construction materials to the delivery outlet described in
191Subsection (8)(b)(i); and
192(iii) does not report the sales of the construction materials on a simplified electronic
193return.
194      (c) For the purposes of Subsection (8)(b), the product is equal to:
195(i) the sales price or purchase price of the qualifying construction materials; and
196(ii) the applicable percentage.
197  (9)(a) As used in this Subsection (9), "Schedule J sale" means a sale reported on State
198      Tax Commission Form TC-62M, Schedule J, or a substantially similar form as
199      designated by the commission.
200      (b) Revenue generated from the applicable percentage by a Schedule J sale within a
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201qualified development zone shall be distributed into the jurisdiction that would have
202received the revenue in the absence of the qualified development zone.
203   (10)(a) As used in this Subsection (10):
204(i) "Applicable percentage" means:
205(A) for a project area adopted by the military installation development authority
206under Title 63H, Chapter 1, Military Installation Development Authority Act,
207for sales occurring within a qualified development zone described in
208Subsection (10)(a)(iii)(A):
209(I) 50% of the revenue from the sales and use tax imposed under this part;
210(II) 100% of the revenue from the sales and use tax imposed by the military
211installation development authority under Section 59-12-401; and
212(III) 100% of the revenue from the sales and use tax imposed by the military
213installation development authority under Section 59-12-402; [and]
214(B) for a project area under Title 11, Chapter 58, Utah Inland Port Authority Act,
215for sales occurring within a qualified development zone described in
216Subsection (10)(a)(iii)(B), 20% of the revenue from the sales and use tax under
217this part;
218(C) for the lake authority boundary, as defined in Section 11-65-101, for sales
219occurring within the qualified development zone described in Subsection
220(10)(a)(ii)(C), 50% of the revenue from the sales and use tax under this part;
221(D) for the Utah Fairpark Area Investment and Restoration District, created in
222Section 11-70-201, for sales occurring within the qualified development zone
223described in Subsection (10)(a)(iii)(D), 100% of the revenue from the sales and
224use tax imposed by the Utah Fairpark Area Investment and Restoration District
225under Sections 59-12-401 and 59-12-402; and
226(E) for an eligible basic special district created under Title 17B, Chapter 1, Part 14,
227Basic Special District, for sales occurring within a qualified development zone
228described in Subsection (10)(a)(iii)(E), 50% of the revenue from the sales and
229use tax imposed under this part[;] .
230(ii) "Eligible basic special district" means the same as that term is defined in Section
23117B-1-1405.
232(iii) "Qualified development zone" means the sales and use tax boundary of:
233(A) a project area adopted by the military installation development authority under
234Title 63H, Chapter 1, Military Installation Development Authority Act;
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235(B) a project area under Title 11, Chapter 58, Utah Inland Port Authority Act;
236(C) the lake authority boundary, as defined in Section 11-65-101;
237(D) the Utah Fairpark Investment and Restoration District, created in Section
23811-70-201; or
239(E) the area within the boundary of an eligible basic special district, and if
240applicable, the boundary of a public infrastructure district created by the basic
241special district;
242(iv) "Qualifying construction materials" means construction materials that are:
243(A) delivered to a delivery outlet within a qualified development zone; and
244(B) intended to be permanently attached to real property within the qualified
245development zone.
246      (b) For a sale of qualifying construction materials, the commission shall distribute the
247product calculated in Subsection (10)(c) to a qualified development zone if the seller
248of the construction materials:
249(i) establishes a delivery outlet with the commission within the qualified development
250zone;
251(ii) reports the sales of the construction materials to the delivery outlet described in
252Subsection (10)(b)(i); and
253(iii) does not report the sales of the construction materials on a simplified electronic
254return[; or] .
255      (c) For the purposes of Subsection (10)(b), the product is equal to:
256(i) the sales price or purchase price of the qualifying construction materials; and
257(ii) the applicable percentage.
258  (11)(a) As used in this Subsection (11):
259(i) "Applicable percentage" means the same as that term is defined in Subsection (10).
260(ii) "Qualified development zone" means the same as that term is defined in
261Subsection (10).
262(iii) "Schedule J sale" means a sale reported on State Tax Commission Form
263TC-62M, Schedule J or a substantially similar form as designated by the
264commission.
265      (b) Revenue generated from the applicable percentage by a Schedule J sale within a
266qualified development zone shall be distributed to the jurisdiction that would have
267received the revenue in the absence of the qualified development zone.
268  (12)(a) As used in this Subsection (12):
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269(i) "Applicable percentage" means, for a major sporting event venue zone created
270under Title 63N, Chapter 3, Part 17, Major Sporting Event Venue Zone Act, for
271sales occurring within the qualified development zone described in Subsection
272(12)(a)(ii):
273(A) 50% of the sales and use tax increment, as that term is defined in Section
27463N-3-601, from the sales and use tax imposed under this part;
275(B) 100% of the revenue from the sales and use tax imposed by the creating entity
276of a major sporting event venue zone under Section 59-12-401; and
277(C) 100% of the revenue from the sales and use tax imposed by the creating entity
278of a major sporting event venue zone under Section 59-12-402.
279(ii) "Qualified development zone" means the sales and use tax boundary, as described
280in Section 63N-3-1710, of a major sporting event venue zone created under Title
28163N, Chapter 3, Part 17, Major Sporting Event Venue Zone Act.
282(iii) "Qualifying construction materials" means construction materials that are:
283(A) delivered to a delivery outlet within a qualified development zone; and
284(B) intended to be permanently attached to real property within the qualified
285development zone.
286(b) For a sale of qualifying construction materials, the commission shall distribute the
287product calculated in Subsection (12)(c) to the creating entity of a qualified
288development zone if the seller of the construction materials:
289(i) establishes a delivery outlet with the commission within the qualified development
290zone;
291(ii) reports the sales of the construction materials to the delivery outlet described in
292Subsection (12)(b)(i); and
293(iii) does not report the sales of the construction materials on a simplified electronic
294return; or
295(c) For the purposes of Subsection (12)(b), the product is equal to:
296(i) the sales price or purchase price of the qualifying construction materials; and
297(ii) the applicable percentage.
298   (13)(a) As used in this Subsection (13):
299(i) "Applicable percentage" means the same as that term is defined in Subsection (12).
300(ii) "Qualified development zone" means the same as that term is defined in
301Subsection (12).
302(iii) "Schedule J sale" means a sale reported on State Tax Commission Form
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303TC-62M, Schedule J or a substantially similar form as designated by the
304commission.
305      (b) Revenue generated from the applicable percentage by a Schedule J sale within a
306qualified development zone shall be distributed to the jurisdiction that would have
307received the revenue in the absence of the qualified development zone.
308Section 2. Effective Date.
309  This bill takes effect on July 1, 2026.
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