Restaurant Tax Repeal Amendments

14
59-12-602
59-12-603
0
Restaurant Tax Repeal Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Norman K Thurston
Senate Sponsor: Lincoln Fillmore
LONG TITLE
General Description:
This bill amends county authority to impose taxes under the Tourism, Recreation, Cultural,
Convention, and Airport Facilities Tax Act.
Highlighted Provisions:
This bill:
repeals the authority for a county to impose the tax, referred to as the restaurant tax, on
food items and alcoholic beverage items sold at restaurants and customized prepared
foods sold at convenience stores, gas stations, and grocery stores;
replaces the restaurant tax with a tax on taxable transactions, other than food and food
ingredients, at a rate that will generate an equivalent amount of revenue to the restaurant
tax; and
makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
59-12-602
, as last amended by Laws of Utah 2025, Chapter 306
59-12-603
, as last amended by Laws of Utah 2025, First Special Session, Chapter 17
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
59-12-602
is amended to read:
59-12-602
. Definitions.
As used in this part:
(1)
(a)
"Airport facility" means an airport of regional significance
, and includes:
.
(b)
"Airport facility" includes:
(a)
(i)
an appurtenance to an airport, including a fixed guideway that provides
transportation service to or from the airport;
(b)
(ii)
a control tower, including a radar system;
(c)
(iii)
a public area of an airport; or
(d)
(iv)
a terminal facility.
(2)
"Airport of regional significance" means the same as that term is defined in Section
59-12-2202
.
(3)
"All-terrain type I vehicle" means the same as that term is defined in Section
41-22-2
.
(4)
"All-terrain type II vehicle" means the same as that term is defined in Section
41-22-2
.
(5)
"All-terrain type III vehicle" means the same as that term is defined in Section
41-22-2
.
(6)
"Convenience store" means a retail establishment described in NAICS Code 445131,
Convenience Retailers, of the 2022 North American Industry Classification System of
the federal Executive Office of the President, Office of Management and Budget.
(7)
"Convention facility" means any publicly owned or operated convention center, sports
arena, or other facility at which conventions, conferences, and other gatherings are held
and whose primary business or function is to host such conventions, conferences, and
other gatherings.
(8)
"Cultural facility" means any publicly owned or operated museum, theater, art center,
music hall, or other cultural or arts facility.
(9)
(a)
"Customized" means prepared or heated by a seller for on-premise or immediate
consumption at the request or specification of the purchaser.
(b)
"Customized" does not include a purchaser specifying the quantity.
(10)
(a)
"Eligible transaction" means amounts paid or charged for a transaction described
in Subsection
59-12-103(1)
.
(b)
"Eligible transaction" includes amounts paid or charged for food and food
ingredients if the food and food ingredients are sold as part of a bundled transaction
attributable to food and food ingredients and tangible personal property other than
food and food ingredients.
(c)
"Eligible transaction" does not include amounts paid or charged for:
(i)
the sales and uses described in Section
59-12-104
to the extent the sales and uses
are exempt under Section
59-12-104
; or
(ii)
except as provided in Subsection
(10)(b)
, food and food ingredients.
(11)
"Gas station" means a retail establishment at which the primary purpose or function is
the sale of fuel.
(11)
(12)
"Grocery store" means a retail establishment at which the primary business or
function is the sale of food or food ingredients for off-premise, but not immediate,
consumption.
(12)
(13)
(a)
"Off-highway vehicle" means any snowmobile, all-terrain type I vehicle,
all-terrain type II vehicle, all-terrain type III vehicle, or motorcycle.
(b)
"Off-highway vehicle" does not include a vehicle that is a motor vehicle under
Section
41-1a-102
.
(13)
(14)
"Motorcycle" means the same as that term is defined in Section
41-22-2
.
(14)
(15)
"Recreation facility" or "tourist facility" means any publicly owned or operated
park, campground, marina, dock, golf course, water park, historic park, monument,
planetarium, zoo, bicycle trails, and other recreation or tourism-related facility.
(15)
(16)
(a)
"Recreational vehicle" means a vehicular unit other than a mobile home,
primarily designed as a temporary dwelling for travel, recreational, or vacation use,
that is pulled by another vehicle.
(b)
"Recreational vehicle" includes:
(i)
a travel trailer;
(ii)
a camping trailer; and
(iii)
a fifth wheel trailer.
(c)
"Recreational vehicle" does not include a vehicle that is a motor vehicle under
Section
41-1a-102
.
(16)
(17)
(a)
"Restaurant" means a retail establishment at which the primary business or
function is the sale of prepared food for immediate or on-premises consumption.
(b)
"Restaurant" includes a coffee shop, cafeteria, luncheonette, soda fountain, dinner
theater, or fast-food service where food is prepared for immediate consumption.
(c)
"Restaurant" does not include:
(i)
a convenience store;
(ii)
a gas station;
(iii)
a grocery store; or
(iv)
a theater that sells food items other than a dinner theater.
(17)
(18)
"Snowmobile" means the same as that term is defined in Section
41-22-2
.
(18)
(19)
"Travel trailer," "camping trailer," or "fifth wheel trailer" means a portable
vehicle without motive power, designed as a temporary dwelling for travel, recreational,
or vacation use that does not require a special highway movement permit when drawn
by a self-propelled motor vehicle.

Section 2. Section
59-12-603
is amended to read:
59-12-603
. County tax -- Bases -- Rates -- Use of revenue -- Adoption of
ordinance required -- Advisory board -- Administration -- Collection -- Administrative
charge -- Distribution -- Enactment or repeal of tax or tax rate change -- Effective date --
Notice requirements.
(1)
(a)
In addition to any other taxes, a county legislative body may
impose
, as provided
in this part,
impose
a tax as follows:
(i)
(A)
a county legislative body
of any county
may impose a tax of not to exceed
3% on
all
short-term rentals of motor vehicles, except for short-term rentals
of motor vehicles made for the purpose of temporarily replacing a person's
motor vehicle that is being repaired
pursuant to
in accordance with
a repair or
an insurance agreement; and
(B)
a county legislative body
of any county
imposing a tax under Subsection
(1)(a)(i)(A)
may, in addition to imposing the tax under Subsection
(1)(a)(i)(A)
,
impose a tax of not to exceed 4% on
all
short-term rentals of motor vehicles,
except for short-term rentals of motor vehicles made for the purpose of
temporarily replacing a person's motor vehicle that is being repaired
pursuant
to
in accordance with
a repair or an insurance agreement;
(ii)
a county legislative body
of any county
may impose a tax of not to exceed 7%
on all short-term rentals of off-highway vehicles and recreational vehicles;
(iii)
before October 1, 2026,
a county legislative body of any county may impose a
tax of not to exceed 1%
of all
on
sales of:
(A)
alcoholic beverages, food and food ingredients, or prepared food sold by a
restaurant; and
(B)
customized prepared food sold by a convenience store, a gas station, or a
grocery store;
(iv)
on October 1, 2026, the tax described in Subsection
(1)(a)(iii)
is replaced with a
tax, at the rate calculated in accordance with Subsection
(11)
, on an eligible
transaction;
(v)
a county legislative body of a county of the first class
, as classified in Section
17-60-104
,
may impose a tax of not to exceed .5% on charges for the
accommodations and services described in Subsection
59-12-103(1)(i)
; and
(v)
(vi)
if a county legislative body
of any county
imposes a tax under Subsection
(1)(a)(i)
, a tax at the same rate applies to car sharing of less than 30 days, except
for car sharing for the purpose of temporarily replacing a person's motor vehicle
that is being repaired
pursuant to
in accordance with
a repair or an insurance
agreement.
(b)
A tax imposed under Subsection
(1)(a)
is subject to the reporting provisions of
Sections
17-78-704
and
17E-2-406
.
(b)
A county legislative body that imposes a tax under this Subsection
(1)
shall comply
with the reporting requirements described in Sections
17-78-704
and
17E-2-406
.
(2)
(a)
Subject to Subsection
(2)(c)
, a county may use revenue from the imposition of a
tax under Subsection
(1)
for:
(i)
financing tourism promotion; and
(ii)
the development, operation, and maintenance of:
(A)
an airport facility;
(B)
a convention facility;
(C)
a cultural facility;
(D)
a recreation facility; or
(E)
a tourist facility.
(b)
(i)
In addition to the uses described in Subsection
(2)(a)
and subject to Subsection
(2)(b)(ii)
, a county of the fourth, fifth, or sixth class
, as classified in Section
17-60-104
,
or a county with a population density of fewer than 15 people per
square mile may expend the revenue from the imposition of a tax under
Subsections
(1)(a)(i)
and
(ii)
on the following activities to mitigate the impacts of
tourism:
(A)
solid waste disposal;
(B)
search and rescue activities;
(C)
law enforcement activities;
(D)
emergency medical services; or
(E)
fire protection services.
(ii)
A county may only expend the revenue as outlined in Subsection
(2)(b)(i)
if the
county's tourism tax advisory board created under Subsection
17-31-8(1)(a)
has
prioritized the use of revenue to mitigate the impacts of tourism.
(c)
A county of the first class
, as classified in Section
17-60-104
,
shall expend at least
$450,000 each year of the revenue from the imposition of a tax authorized by
Subsection
(1)(a)(iv)
(1)(a)(v)
within the county to fund a marketing and ticketing
system designed to:
(i)
promote tourism in ski areas within the county by persons that do not reside within
the state; and
(ii)
combine the sale of:
(A)
ski lift tickets; and
(B)
accommodations and services described in Subsection
59-12-103(1)(i)
.
(3)
A tax imposed under this part may be pledged as security for bonds, notes, or other
evidences of indebtedness incurred by a county, city, or town under Title
11, Chapter 14
,
Local Government Bonding Act, or a community reinvestment agency under Title
17C,
Chapter 1, Part 5
, Agency Bonds, to finance:
(a)
an airport facility;
(b)
a convention facility;
(c)
a cultural facility;
(d)
a recreation facility; or
(e)
a tourist facility.
(4)
(a)
To impose a tax under Subsection
(1)
, the county legislative body shall adopt an
ordinance imposing the tax.
(b)
The ordinance under Subsection
(4)(a)
shall include provisions substantially the
same as those contained in Part
1, Tax Collection
, except that the tax shall be
imposed only on those items and sales described in Subsection
(1)
.
(c)
The name of the county as the taxing agency shall be substituted for that of the state
where necessary, and an additional license is not required if one has been or is issued
under Section
59-12-106
.
(5)
To maintain in effect a tax ordinance adopted under this part, each county legislative
body shall
adopt
, within 30 days of any amendment of any applicable provisions of Part
1, Tax Collection
,
adopt
amendments to the county's tax ordinance to conform with the
applicable amendments to Part
1, Tax Collection
.
(6)
(a)
Regardless of whether a county of the first class
, as classified in Section
17-60-104
,
creates a tourism tax advisory board in accordance with Section
17-78-706
, the
county legislative body
of the county of the first class
shall create a tax advisory
board in accordance with this Subsection
(6)
.
(b)
The tax advisory board shall be composed of nine members appointed as follows:
(i)
four members shall be residents of a county of the first class
, as classified in
Section
17-60-104
,
appointed by the county legislative body
of the county of the
first class
; and
(ii)
subject to Subsections
(6)(c)
and
(d)
, five members shall be mayors of cities or
towns within the county of the first class
, as classified in Section
17-60-104
,

appointed by an organization representing all mayors of cities and towns within
the county of the first class
, as classified in Section
17-60-104
.
(c)
Five members of the tax advisory board constitute a quorum.
(d)
The county legislative body of the county of the first class
, as classified in Section
17-60-104
,
shall determine:
(i)
terms of the members of the tax advisory board;
(ii)
procedures and requirements for removing a member of the tax advisory board;
(iii)
voting requirements, except that action of the tax advisory board shall be by at
least a majority vote of a quorum of the tax advisory board;
(iv)
chairs or other officers of the tax advisory board;
(v)
how meetings are to be called
the procedures for calling meetings
and the
frequency of meetings; and
(vi)
the compensation, if any, of members of the tax advisory board.
(e)
The tax advisory board under this Subsection
(6)
shall advise the county legislative
body of the county of the first class
, as classified in Section
17-60-104
,
on the
expenditure of revenue collected within the county
of the first class
from the taxes
described in Subsection
(1)(a)
(1)
.
(7)
(a)
(i)
Except as provided in Subsection
(7)(a)(ii)
(7)(b)
, a tax authorized under
this part shall be administered, collected, enforced, and interpreted in accordance
with:
(A)
(i)
the same procedures used to administer, collect, enforce, and interpret the tax
under:
(I)
(A)
Part
1, Tax Collection
; or
(II)
(B)
Part
2, Local Sales and Use Tax Act
; and
(B)
(ii)
Chapter 1, General Taxation Policies.
(ii)
(b)
A tax under this part is not subject to Section
59-12-107.1
or
59-12-123
or
Subsections
59-12-205(2)
and
(4)
through (6).
(b)
Except as provided in Subsection
(7)(c)
:
(i)
for a tax under this part other than the tax under Subsection
(1)(a)(i)(B)
, the
commission shall distribute the revenue to the county imposing the tax; and
(ii)
for a tax under Subsection
(1)(a)(i)(B)
, the commission shall distribute the
revenue according to the distribution formula provided in Subsection
(8)
.
(c)
The commission shall retain and deposit an administrative charge in accordance with
Section
59-1-306
from the revenue the commission
collects
receives
from a tax
under this part.
(8)
(a)
The commission shall distribute the revenue for a tax imposed in accordance with
Subsection
(1)
, other than in accordance with Subsection
(1)(a)(i)(B)
, to the county
imposing the tax.
(b)
The commission shall distribute the revenue generated by the tax
under
imposed in
accordance with
Subsection
(1)(a)(i)(B)
to each county
collecting a tax under
imposing a tax in accordance with
Subsection
(1)(a)(i)(B)
according to the following
formula:
(i)
the commission shall distribute 70% of the revenue based on the percentages
generated by dividing the revenue collected by each county under Subsection
(1)(a)(i)(B)
by the total revenue collected by all counties under Subsection
(1)(a)(i)(B)
; and
(ii)
the commission shall distribute 30% of the revenue based on the percentages
generated by dividing the population of each county collecting a tax under
Subsection
(1)(a)(i)(B)
by the total population of all counties collecting a tax
under Subsection
(1)(a)(i)(B)
.
(b)
(c)
Population for purposes of
this
Subsection
(8)
(8)(b)
shall be based on, to the
extent not otherwise required by federal law:
(i)
the estimate of the Utah Population Committee created in Section
63C-20-103
; or
(ii)
if the Utah Population Committee estimate is not available, the most recent
census or census estimate of the United States Bureau of the Census.
(9)
(a)
For purposes of this Subsection
(9)
:
(i)
"Annexation" means an annexation to a county under Title
17, Chapter 61, Part 3
,
County Annexation.
(ii)
"Annexing area" means an area that is annexed into a county.
(b)
(i)
Except as provided in Subsection
(9)(c)
, if a county enacts or repeals a tax or
changes the rate of a tax under this part, the enactment, repeal, or change shall
take effect:
(A)
on the first day of a calendar quarter; and
(B)
after a 90-day period beginning on the day on which the commission receives
notice meeting the requirements of Subsection
(9)(b)(ii)
from the county.
(ii)
The notice described in Subsection
(9)(b)(i)(B)
shall state:
(A)
that the county will enact or repeal a tax or change the rate of a tax under this
part;
(B)
the statutory authority for the tax described in Subsection
(9)(b)(ii)(A)
;
(C)
the effective date of the tax described in Subsection
(9)(b)(ii)(A)
; and
(D)
if the county enacts the tax or changes the rate of the tax described in
Subsection
(9)(b)(ii)(A)
, the rate of the tax.
(c)
(i)
If the billing period for a transaction begins before the effective date of the
enactment of the tax or the tax rate increase imposed under Subsection
(1)
, the
enactment of the tax or the tax rate increase shall take effect on the first day of the
first billing period that begins after the effective date of the enactment of the tax
or the tax rate increase.
(ii)
If the billing period for a transaction begins before the effective date of the repeal
of the tax or the tax rate decrease imposed under Subsection
(1)
, the repeal of the
tax or the tax rate decrease shall take effect on the first day of the last billing
period that began before the effective date of the repeal of the tax or the tax rate
decrease.
(d)
(i)
Except as provided in Subsection
(9)(e)
, if the annexation will result in the
enactment, repeal, or change in the rate of a tax under this part for an annexing
area, the enactment, repeal, or change shall take effect:
(A)
on the first day of a calendar quarter; and
(B)
after a 90-day period beginning on the day on which the commission receives
notice meeting the requirements of Subsection
(9)(d)(ii)
from the county that
annexes the annexing area.
(ii)
The notice described in Subsection
(9)(d)(i)(B)
shall state:
(A)
that the annexation described in Subsection
(9)(d)(i)
will result in an
enactment, repeal, or change in the rate of a tax under this part for the annexing
area;
(B)
the statutory authority for the tax described in Subsection
(9)(d)(ii)(A)
;
(C)
the effective date of the tax described in Subsection
(9)(d)(ii)(A)
; and
(D)
if the county enacts the tax or changes the rate of the tax described in
Subsection
(9)(d)(ii)(A)
, the rate of the tax.
(e)
(i)
If the billing period for a transaction begins before the effective date of the
enactment of the tax or the tax rate increase imposed under Subsection
(1)
, the
enactment of the tax or the tax rate increase shall take effect on the first day of the
first billing period that begins after the effective date of the enactment of the tax
or the tax rate increase.
(ii)
If the billing period for a transaction begins before the effective date of the repeal
of the tax or the tax rate decrease imposed under Subsection
(1)
, the repeal of the
tax or the tax rate decrease shall take effect on the first day of the last billing
period that began before the effective date of the repeal of the tax or the tax rate
decrease.
(10)
(a)
A county may not impose the tax described in Subsection
(1)(a)(iii)
on or after
October 1, 2026.
(b)
Notwithstanding Subsection
(9)(b)
, a county does not need to provide notice of the
repeal of the tax described in Subsection
(1)(a)(iii)
.
(11)
(a)
(i)
The rate of the tax described in Subsection
(1)(a)(iv)
is equal to the rate the
commission estimates to generate the same amount of revenue distributed to the
county from the tax described in Subsection
(1)(a)(iii)
between January 1, 2025,
and December 31, 2025.
(ii)
The commission shall round the estimated rate, expressed as a percentage, up to
the second decimal place.
(12)
(a)
(i)
Notwithstanding Subsection
(4)
, a county does not need to adopt an
ordinance imposing the tax described in Subsection
(1)(a)(iv)
.
(ii)
A county shall amend the county's ordinance to reflect the replacement of the tax
described in Subsection
(1)(a)(iii)
with the tax described in Subsection
(1)(a)(iv)
.
(b)
Notwithstanding Subsection
(9)(b)
, a county does not need to provide notice of the
enactment of the tax described in Subsection
(1)(a)(iv)
.
(13)
A county may repeal or reduce the amount of tax imposed by Subsection
(1)(a)(iv)
in
accordance with this section.
Section 3.
Effective Date.
This bill takes effect on
May 6, 2026
.
3-1-26 9:34 PM