Are replacement or repair parts for exempt ski resort equipment (snowmaking equipment, grooming equipment, tramways) also exempt from Utah sales tax?

Plain-English summary

A company that sells ski slope grooming equipment and repair services to Utah ski resorts wrote to the Utah State Tax Commission on July 22, 1996, about a brand-new exemption. Effective July 1, 1996, under Senate Bill 275, the "Ski Resort Sales Tax Exemption" covered ski grooming tractors and attachments (blades, blowers, tillers), whether new or used. The company understood the exemption to cover only the equipment itself — not repair parts or billable service labor — but some of its customers believed replacement (spare) parts were exempt too. The company asked the Commission to settle the question in writing.

The Commission's first response, dated August 27, 1996, was only interim. The new law didn't specifically address replacement parts, and the Commission said its decision was on hold pending the outcome of a similar question involving the manufacturing exemption. In the meantime, it told the company to treat replacement-part sales as taxable, with the caveat that customers could seek a refund later if the Commission ultimately ruled the other way.

The Utah Legislature then met in special session to address the sales tax exemption for manufacturers' purchases, and significantly narrowed that manufacturing exemption — but it did not touch the ski resort exemption. Because the legislature left the ski resort exemption alone, the Commission concluded that "a broad interpretation of the ski equipment exemption is the only legally defendable position." In its final advisory opinion (issued December 2 and again December 6, 1996), the Commission ruled that Utah Code § 59-12-104(42)'s exemption for sales to a ski resort of snowmaking equipment, ski slope grooming equipment, and passenger tramways extends to sales of repair and replacement parts or equipment for that qualifying equipment. Two carve-outs remained: lubricants, fluids, and solvents are not treated as "equipment" and so are not exempt, and the exemption covers only the purchase of the part or equipment itself — not the labor to install or repair it, which is taxable under Utah law and must be separately stated on the bill or invoice if the same vendor sells the part and performs the labor.

What this means for you

Ski resort operators

If you're buying repair or replacement parts for exempt equipment — snowmaking equipment, ski slope grooming equipment (including grooming tractors and attachments like blades, blowers, and tillers), or passenger tramways — those parts qualify for the same sales tax exemption as the equipment itself. But watch your invoices: lubricants, fluids, and solvents used to maintain that equipment are taxable, and so is any labor charged to install or repair the parts.

Equipment and parts sellers/repair vendors

If you sell repair or replacement parts to a ski resort and also perform the installation or repair work, you must separately itemize the labor charge from the parts charge on your bill or invoice. The parts can be sold exempt; the labor cannot. The Commission said it would notify all Utah ski resorts of this decision, so this position should have been broadly communicated to the industry at the time.

Accountants and tax professionals

Note the timeline: the Commission initially told the taxpayer to treat replacement parts as taxable (August 1996) while it waited on a related manufacturing-exemption question, then reversed to a broad exemption once the legislature narrowed the manufacturing exemption in special session without touching the ski resort exemption (December 1996). If you're reviewing older transactions from this window, be aware the Commission's own guidance changed mid-year, and it flagged that customers taxed under the interim guidance could seek refunds once the final decision issued.

Common questions

Q: Are replacement parts for ski resort grooming equipment exempt from Utah sales tax?
A: Yes. The Commission concluded that Utah Code § 59-12-104(42)'s exemption for snowmaking equipment, ski slope grooming equipment, and passenger tramways sold to a ski resort extends to repair and replacement parts or equipment for that qualifying equipment.

Q: Are lubricants, fluids, or solvents used on the equipment exempt too?
A: No. The ruling specifically states lubricants, fluids, and solvents are not considered exempt "equipment."

Q: Is the labor to install or repair the parts also exempt?
A: No. The exemption covers only the purchase of the item, not labor to install or repair it; that labor is taxable under Utah law and must be separately stated on the invoice if the vendor both sells and installs or repairs the equipment.

Q: Why did the Commission first say replacement parts were taxable, then later say they were exempt?
A: The August 27, 1996 letter was interim guidance pending a decision on a related manufacturing-exemption question. After the legislature narrowed the manufacturing exemption in special session but left the ski resort exemption untouched, the Commission concluded a broad interpretation of the ski equipment exemption was the only legally defensible position, and issued a final advisory opinion in December 1996 confirming the exemption for repair and replacement parts.

Q: Can I rely on this ruling for my own ski resort or supply business?
A: Not as binding precedent. This is a 1996 advisory opinion issued to one taxpayer based on the facts it described and the law then in effect; it binds the Commission only for that taxpayer and those facts. It also predates decades of subsequent statute renumbering and amendment, so confirm the current text of any applicable exemption before relying on it.

Citations and references

Statutes:

• Utah Code § 59-12-104(42) — as printed in this 1996 ruling, exempts from sales tax sales to a ski resort of (a) snowmaking equipment, (b) ski slope grooming equipment, and (c) passenger tramways; interpreted here to also cover repair and replacement parts or equipment for that qualifying equipment, but not lubricants, fluids, solvents, or installation/repair labor. (This is a 1996 citation — Utah Code sections have been renumbered and amended many times since; verify the current statute before relying on it.)

Source

• Landing page: https://tax.utah.gov/commission/rulings/
• Original page: https://files.tax.utah.gov/tax/commission/ruling/96-130.htm

Original ruling text

96-130

Responses
August 27, 1996, December 2, 1996 and December 6, 1996 COMMISSION

Request

July
22, 1996

Utah
State Tax Commission

210
North 1950 West

Salt
Lake City, UT 84134

Dear
Sir:

Our
company provides ski slope grooming equipment and repair services to ski resorts
in the state of Utah. It is our
understanding that the Ski Resort Sales Tax Exemption that became effect July
1, 1996 only includes the sale of ski grooming tractors and attachments (blade
blowers, tillers) either new or used.
The exemption does not include the sale of repair parts or billable
service labor.

The
above is our understanding of what is exempt under Senate Bill 275. However, we have customers who believe that
the above exemption is also applicable to the purchase of replacement parts
(spare parts).

With
this letter, XXXXX formally requests a ruling in writing that will address the
above issues in detail. This would
ensure that we are following the rules as they were intended and that we will
have something in writing to provided to our customers when a conflict arises.

Thank-you
in advance for your cooperation in clarifying the above issues.

Sincerely,

XXXXX

August
27, 1996

XXXXX

Re: purchase of replacement parts for exempt ski resort
equipment

Dear XXXXX,

We
have received your request for an advisory opinion regarding the application of
sales and use tax to purchases of replacement parts for ski resort equipment
and machinery. As you indicated in your
letter, the senate bill did not specifically address replacement parts, so
representatives of the ski industry have asked the Commission to rule on this
issue. The Commission�s decision is
pending the outcome of a similar issue pertaining to manufacturing
equipment. Pending that decision, I
suggest that you treat the sale of replacement parts as taxable. If the Commission arrives at a different
decision in the future, your customers may request a refund at that time.

The
Commission will formally respond to your advisory opinion request after it has
made its final decision on this issue.
In the meantime, if you have questions, please feel free to contact me
at XXXXX.

Sincerely,

XXXXX

December
6, 1996

XXXXX

Advisory Opinion - Exemption for repair or
replacement parts.

Dear XXXXX,

The
Utah State Legislature recently met in special session to discuss the sales tax
exemption for certain purchases by manufacturers. The legislature determined that it would not address the ski
resort exemption during the special session.
Therefore, we offer you the following tax advice based on our
interpretation of the current statutory language.

Section
59-12-104 of the Utah Code exempts from sales tax:

(42)
sales to a ski resort of:

(a) snowmaking equipment;

(b) ski slope grooming equipment; and

(c) passenger tramways . . . .

We interpret this statute to include sales of repair
and replacement parts or equipment that are sold for qualifying uses. Lubricants, fluids and solvents are not
exempt. The exemption extends only to
the purchase of the item, not the labor to repair it. Under Utah law, labor to install or repair an item of tangible
personal property is taxable. If your
company sells repair or replacement parts and performs the repair or
replacement service, please itemize the
charges for labor separately on your bill or invoice.

We
will notify all Utah ski resorts of this decision. Please let us know if we can be of further assistance.

For
the Commission,

Joe
B. Pacheco,

Commissioner

Re: Ski
Resort Sales Tax Exemption

Dear

The
Utah State Legislature recently met in special session to discuss the sales tax
exemption for certain purchases by manufacturers. The question at issue was whether repair and replacement parts
qualify for exemption. A similar
question has arisen with respect to repair and replacement parts for snowmaking
equipment, grooming equipment and tramways.
The legislature significantly
narrowed the manufacturing exemption, but it did not address the ski resort
exemption. The Commission concluded,
therefore, that a broad interpretation of the ski equipment exemption is the
only legally defendable position. The
legislature may narrow the ski equipment exemption during the up coming session
to make it consistent with the manufacturing exemption. In the meantime, we offer you the following
tax advice pertaining to purchases of this nature:

Section 59-12-104 (42) of the Utah Code exempts from
sales tax:

sales
to a ski resort of:

(a) snowmaking equipment;

(b) ski slope grooming equipment; and

(c) passenger tramways . . . .

Sales of repair and replacement parts or equipment
for qualifying equipment are also exempt.
Lubricants, fluids and solvents are not considered equipment and they
are not exempt.

The
exemption extends only to the purchase of the item, not the labor to install or
repair it. Under Utah law labor to repair
an item of tangible personal property is taxable. Labor to install an item of tangible personal property in
connection with other tangible personal property is also taxable. If the vendor sells and installs or repairs
qualifying equipment, taxable labor changes be separately stated on the bill or
invoice.

Please
contact us if you have questions about this exemption.

For
the Commission,

Joe
B. Pacheco,

Commissioner