TITLE 44
Taxation

CHAPTER 44-18.1
Adoption of the Streamlined Sales and Use Tax Agreement

SECTION 44-18.1-17


§ 44-18.1-17. Enactment of exemptions.

(a) For the purpose of this section and § 44-18.1-18, the following definitions apply:

(1) Entity-Based Exemption. An exemption based on who purchases the product or who sells the product. An exemption that is available to all individuals shall not be considered an entity-based exemption.

(2) Product-Based Exemption. An exemption based on the description of the product and not based on who purchases the product or how the purchaser intends to use the product.

(3) Use-Based Exemption. An exemption based on a specified use of the product by the purchaser.

(b) A member state shall enact entity-based, use-based and product-based exemptions in accordance with the provisions of this section and shall utilize common definitions in accordance with the provisions of this section and shall utilize common definitions in accordance with the provisions of § 44-18.1-28 and Library of Definitions in Appendix C of the Streamlined Sales and Use Tax Agreement.

(c)(1) A member state may enact a product-based exemption without restriction if Part II of the Library of Definitions does not have a definition for such product.

(2) A member state may enact a product-based exemption for a product if Part II of the Library of Definitions has a definition for such product and the member state utilizes in the exemption the product definition in a manner consistent with Part II of the Library of Definitions and § 44-18.1-28.

(3) A member state may enact a product-based exemption exempting all items included within a definition in Part II of the Library of Definitions but shall not exempt specific items included within the product definition unless the product definition sets out an exclusion for such item.

(d)(1) A member state may enact an entity-based or a use-based exemption for a product without restriction if Part II of the Library of Definitions does not have a definition for such product.

(2) A member state may enact an entity-based or a use-based exemption for a product if Part II of the Library of Definitions has a definition for such product and the member state utilizes in the exemption the product definition in a manner consistent with Part II of the Library of Definitions and § 44-18.1-28 of this Agreement.

(3) A member state may enact an entity-based exemption for an item if Part II of the Library of Definitions does not have a definition for such item but has a definition for a product that includes such item.

(4) A member state may not enact a use-based exemption for an item which effectively constitutes a product-based exemption if Part II of the Library of Definitions has a definition for a product that includes such item.

(5) A member state may enact a use-based exemption for an item if Part II of the Library of Definitions has a definition for a product that includes such item, if not prohibited in Subsection (C)(4) of this section and if consistent with the definition in Part II of the Library of Definitions.

(e) For purposes of complying with the requirements in this section, the inclusion of a product within the definition of tangible personal property is disregarded.

History of Section.
(P.L. 2006, ch. 246, art. 30, § 12.)