§ 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.