Sales Tax Exemption Enacted for Purchases Related to Life and Science Research and Development Facilities in Utah

Apr 3rd, 2012

Utah recently enacted a sales tax exemption for purchases related to the construction and operation of life and science research development facilities. 2012 Utah House Bill 365.

The new law goes into effect July 1, 2012, and amends Utah Code Ann. sec. 59-12-104(73)-(74). Under this law, materials used in the construction of a new life science research and development facility, or the expansion of an existing facility, will be exempt from tax when the materials are clearly identified, segregated, and installed or converted into real property. Also, amounts paid or charged for the purchase or lease of equipment and machinery that is used in performing qualified research and has an economic life of three years or more will also be exempt from tax.

For purposes of the exemption, "life science research and development facility" is defined as "a facility owned, leased, or rented by a life science establishment if research and development is performed in 51% or more of the total area of the facility."