(1)The tax imposed
by section 39-26-202 shall be a first and prior lien on the tangible personal
property stored, used, or consumed, subject only to any valid mortgage or other
liens of record on and prior to the recording of notice as required by section 39-26-118 (3), and, when such tax is collected by retailers or agents, shall be a first and
prior lien on all the stock of goods or business fixtures of or used by such retailer,
excepting goods sold in the ordinary course of business, which lien shall have
precedence over all other liens of whatsoever kind or nature, except as to
preexisting claims or liens of a bona fide mortgagee, pledgee, judgment creditor, or
purchaser whose rights have attached prior to the filing of the notice on property of
the taxpayer, other than the g
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(1) The tax imposed
by section 39-26-202 shall be a first and prior lien on the tangible personal
property stored, used, or consumed, subject only to any valid mortgage or other
liens of record on and prior to the recording of notice as required by section 39-26-118 (3), and, when such tax is collected by retailers or agents, shall be a first and
prior lien on all the stock of goods or business fixtures of or used by such retailer,
excepting goods sold in the ordinary course of business, which lien shall have
precedence over all other liens of whatsoever kind or nature, except as to
preexisting claims or liens of a bona fide mortgagee, pledgee, judgment creditor, or
purchaser whose rights have attached prior to the filing of the notice on property of
the taxpayer, other than the goods, stock in trade, and business fixtures of such
taxpayer.
(2) Upon default of payment thereof, the executive director of the
department of revenue, after demand upon the person owing such tax, may bring an
action in his name as executive director in attachment and seize property as
authorized by this section to secure the payment of said tax, interest, and penalties.
In any such proceeding, no bond shall be required of the executive director, nor
shall any sheriff require from the executive director an indemnifying bond for
executing the writ of attachment or levy, and no sheriff shall be liable in damages
when acting in accordance with such writs. The remedies provided in this section
shall be in addition to all other remedies.
(3) Any taxpayer or person in possession shall provide a copy of any lease
pertaining to the assets and property described in subsection (1) of this section to
the department of revenue within ten days after seizure by the department of such
assets and property. The department shall verify that such lease is bona fide and
notify the owner that such lease has been received by the department. The
department shall use its best efforts to notify the owner of the real or personal
property which might be subject to the lien created in subsection (1) of this section.
The real or personal property of an owner who has made a bona fide lease to any
taxpayer described in subsection (1) of this section shall be exempt from the lien
created therein if such property can reasonably be identified from the lease
description or if the lessee is given an option to purchase in such lease and has not
exercised such option to become the owner of the property leased. This exemption
shall be effective from the date of the execution of the lease. Such exemption shall
also apply if the lease is recorded with the county clerk and recorder of the county
where the property is located or based or a memorandum of the lease is filed with
the department of revenue on such forms as may be prescribed by said department
after the execution of the lease at a cost for such filing of two dollars and fifty
cents per document. Motor vehicles which are properly registered in this state,
showing the lessor as owner thereof, shall be exempt from the lien created in
subsection (1) of this section; except that said lien shall apply to the extent that the
lessee has an earned reserve, allowance for depreciation not to exceed fair market
value, or similar interest which is or may be credited to the lessee. Where the lessor
and lessee are blood relatives or relatives by law or have twenty-five percent or
more common ownership, a lease between such lessee and such lessor shall not be
considered as bona fide for purposes of this section.
(3.5) Any coin-operated vending machine or video or other game machine
shall be exempt from the lien created in subsection (1) of this section if:
(a) The machine is placed on the retailer's premises under the terms of a
lease or other agreement under which the retailer is given no right to become the
owner of the machine;
(b) The machine is plainly marked in a location accessible to agents of the
department of revenue with information sufficient to permit identification of the
owner of said property; and
(c) The owner of the machine has filed with the department of revenue a
schedule listing the machine by serial number and including thereon the owner's
full name and the address of his business and such other information as the
executive director of the department of revenue may require. To protect the
anonymity of owners of property, the executive director of the department of
revenue may permit the marking of property covered by this subsection (3.5) to be
marked using numbers or other coded identification.
(4) Any retailer who is in possession of property under the terms of a lease,
which property is exempt from the lien as provided in this section, may be required
by the executive director to remit tax funds due at more frequent intervals than
monthly, but no more frequently than semimonthly, or may be required to furnish
security for the proper payment of taxes whenever the collection of taxes appears
to be in jeopardy.