42-5009

42-5009. Certificates establishing deductions;
liability for making false certificate

A. A person who conducts any business classified under article 2 of this chapter
may establish entitlement to the allowable deductions from the tax base of that business
by both:

1. Marking the invoice for the transaction to indicate that the gross proceeds of
sales or gross income derived from the transaction was deducted from the tax base.

2. Obtaining a certificate executed by the purchaser indicating the name and
address of the purchaser, the precise nature of the business of the purchaser, the
purpose for which the purchase was made, the necessary facts to establish the appropriate
deduction and the tax license number of the purchaser to the extent the deduction depends
on the purchaser conducting business classified under article 2 of this chapter and a
certification that the person executing the certificate is authorized to do so on behalf
of the purchaser. The certificate may be disregarded if the seller has reason to believe
that the information contained in the certificate is not accurate or complete.

B. A person who does not comply with subsection A of this section may establish
entitlement to the deduction by presenting facts necessary to support the entitlement,
but the burden of proof is on that person.

C. The department may prescribe a form for the certificate described in subsection
A of this section. Under such rules as it may prescribe, the department may also describe
transactions with respect to which a person is not entitled to rely solely on the
information contained in the certificate provided for in subsection A of this section but
must instead obtain such additional information as required by the rules in order to be
entitled to the deduction.

D. If a seller is entitled to a deduction by complying with subsection A of this
section, the department may require the purchaser which caused the execution of the
certificate to establish the accuracy and completeness of the information required to be
contained in the certificate which would entitle the seller to the deduction. If the
purchaser cannot establish the accuracy and completeness of the information, the
purchaser is liable in an amount equal to any tax, penalty and interest which the seller
would have been required to pay under this article if the seller had not complied with
subsection A of this section. Payment of the amount under this subsection exempts the
purchaser from liability for any tax imposed under article 4 of this chapter. The amount
shall be treated as tax revenues collected from the seller in order to designate the
distribution base for purposes of section 42-5029.

E. If a seller is entitled to a deduction by complying with subsection B of this
section, the department may require the purchaser to establish the accuracy and
completeness of the information provided to the seller that entitled the seller to the
deduction. If the purchaser cannot establish the accuracy and completeness of the
information, the purchaser is liable in an amount equal to any tax, penalty and interest
that the seller would have been required to pay under this article if the seller had not
complied with subsection B of this section. Payment of the amount under this subsection
exempts the purchaser from liability for any tax imposed under article 4 of this chapter.
The amount shall be treated as tax revenues collected from the seller in order to
designate the distribution base for purposes of section 42-5029.

F. The department may prescribe a form for a certificate used to establish
entitlement to the deductions described in section 42-5061, subsection A, paragraph 47
and section 42-5063, subsection B, paragraph 3. Under rules the department may prescribe,
the department may also require additional information for the seller to be entitled to
the deduction. If a seller is entitled to the deductions described in section 42-5061,
subsection A, paragraph 47 and section 42-5063, subsection B, paragraph 3, the department
may require the purchaser who executed the certificate to establish the accuracy and
completeness of the information contained in the certificate that would entitle the
seller to the deduction. If the purchaser cannot establish the accuracy and completeness
of the information, the purchaser is liable in an amount equal to any tax, penalty and
interest that the seller would have been required to pay under this article. Payment of
the amount under this subsection exempts the purchaser from liability for any tax imposed
under article 4 of this chapter. The amount shall be treated as tax revenues collected
from the seller in order to designate the distribution base for purposes of section
42-5029.

G. If a seller claims a deduction under section 42-5061, subsection A, paragraph 25
and establishes entitlement to the deduction with an exemption letter that the purchaser
received from the department and the exemption letter was based on a contingent event,
the department may require the purchaser that received the exemption letter to establish
the satisfaction of the contingent event within a reasonable time. If the purchaser
cannot establish the satisfaction of the event, the purchaser is liable in an amount
equal to any tax, penalty and interest that the seller would have been required to pay
under this article if the seller had not been furnished the exemption letter. Payment of
the amount under this subsection exempts the purchaser from liability for any tax imposed
under article 4 of this chapter. The amount shall be treated as tax revenues collected
from the seller in order to designate the distribution base for purposes of section
42-5029. For the purposes of this subsection, "reasonable time" means a time limitation
that the department determines and that does not exceed the time limitations pursuant to
section 42-1104.

H. From and after December 31, 2005 through December 31, 2010, the department shall
prescribe a form for a certificate used to establish entitlement to the deductions
described in section 42-5061, subsection B, paragraph 23, section 42-5066, subsection B,
paragraph 5, section 42-5070, subsection C, paragraph 2, section 42-5074, subsection B,
paragraph 10, section 42-5075, subsection B, paragraph 20 and section 42-5159, subsection
B, paragraph 23 relating to motion picture production. The certificate is effective for
twelve consecutive calendar months from and after the date of issuance and is subject to
the following requirements and conditions:

1. A motion picture production company as defined in section 41-1517 may use a
certificate issued pursuant to this subsection only with respect to production costs
described in section 41-1517, subsection A, paragraph 2 that are subject to taxation
under article 2 or 4 of this chapter.

2. The department shall issue the certificate to a motion picture production
company on receiving the company's letter of qualification from the department of
commerce, except as otherwise provided in this subsection.

3. The department shall not issue a certificate to a motion picture production
company that has a delinquent tax balance owing to the department under this title or
title 43.

4. If the department determines that a motion picture production company no longer
qualifies for a certificate or has used the certificate for unauthorized purposes, the
department shall revoke the certificate and the motion picture production company is
liable for an amount equal to the transaction privilege and use taxes that would have
been due on taxable transactions during the time the company did not qualify for or
improperly used the certificate, with interest and penalties as provided by law.

5. The department shall maintain annual data on the total amount of monies exempted
through the use of certificates issued pursuant to this subsection and shall provide
those data to the department of commerce on request.

6. The department of revenue, with the cooperation of the department of commerce,
shall adopt rules and publish and prescribe forms and procedures as necessary to
effectuate the purposes of this subsection.

7. If, after audit, the department determines that a motion picture production
company failed to meet any of the requirements prescribed by this subsection, any
deductions from taxation from the use of the certificate are subject to recapture and
payment by the motion picture production company to the department.

I. The department shall prescribe forms for certificates used to establish the
satisfaction of the criteria necessary to qualify the sale of a motor vehicle for the
deductions described in section 42-5061, subsection A, paragraph 14, paragraph 28,
subdivision (a) and paragraph 45 and subsection U. To establish entitlement to these
deductions, a motor vehicle dealer shall retain:

1. A valid certificate as prescribed by this subsection completed by the purchaser
and obtained prior to the issuance of the nonresident registration permit authorized by
section 28-2154.

2. A copy of the nonresident registration permit authorized by section 28-2154.

3. A legible copy of a current valid driver license issued to the purchaser by
another state or foreign country that indicates an address outside of this state. For the
sale of a motor vehicle to a nonresident entity, the entity's representative must have a
current valid driver license issued by the same jurisdiction as that in which the entity
is located.

4. For the purposes of the deduction provided by section 42-5061, subsection A,
paragraph 14, a certificate documenting the delivery of the motor vehicle to an
out-of-state location.

J. Notwithstanding subsection A, paragraph 2 of this section, if a motor vehicle
dealer has established entitlement to a deduction by complying with subsection I of this
section, the department may require the purchaser who executed the certificate to
establish the accuracy and completeness of the information contained in the certificate
that entitled the motor vehicle dealer to the deduction. If the purchaser cannot
establish the accuracy and completeness of the information, the purchaser is liable in an
amount equal to any tax, penalty and interest that the motor vehicle dealer would have
been required to pay under this article and under articles IV and V of the model city tax
code as defined in section 42-6051. Payment of the amount under this subsection exempts
the purchaser from liability for any tax imposed under article 4 of this chapter and any
tax imposed under article VI of the model city tax code as defined in section 42-6051.
The amount shall be treated as tax revenues collected from the motor vehicle dealer in
order to designate the distribution base for purposes of section 42-5029.

K. Notwithstanding any other law, compliance with subsection I of this section by a
motor vehicle dealer entitles the motor vehicle dealer to the exemption provided in
section 42-6004, subsection A, paragraph 4.