01-24 11:24 1st Sub. (Buff) H.B. 61
Bridger Bolinder proposes the following substitute bill:
1
Tax Withholding Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Bridger Bolinder
Senate Sponsor: Daniel McCay
2
3
LONG TITLE
4
General Description:
5
This bill modifies requirements for tax withholding.
6
Highlighted Provisions:
7
This bill:
8
▸ provides penalty provisions that apply if a producer fails to file a Form 1099 for mineral
9
production tax withholding or fails to file the Form 1099 on time;
10
▸ amends the percentage of the mineral production tax a producer withholds to align with
11
the income tax rate;
12
▸ amends the information a producer is required to provide on a withholding return;
13
▸ provides the requirements for a producer to file a form 1099 with the State Tax
14
Commission; and
15
▸ makes technical and conforming changes.
16
Money Appropriated in this Bill:
17
None
18
Other Special Clauses:
19
This bill provides a special effective date.
20
Utah Code Sections Affected:
21
AMENDS:
22
59-1-401, as last amended by Laws of Utah 2024, Chapter 96
23
59-6-102, as last amended by Laws of Utah 2008, Chapter 255
24
59-6-103, as last amended by Laws of Utah 2017, Chapter 226
25
26
Be it enacted by the Legislature of the state of Utah:
27
Section 1. Section 59-1-401 is amended to read:
28
59-1-401 . Definitions -- Offenses and penalties -- Rulemaking authority -- 1st Sub. (Buff) H.B. 61 01-24 11:24
29
Statute of limitations -- Commission authority to waive, reduce, or compromise penalty
30
or interest.
31
(1) As used in this section:
32
(a) "Tax, fee, or charge" means:
33
(i) a tax, fee, or charge the commission administers under:
34
(A) this title;
35
(B) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
36
(C) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
37
(D) Section 19-6-410.5;
38
(E) Section 19-6-714;
39
(F) Section 19-6-805;
40
(G) Section 34A-2-202;
41
(H) Section 40-6-14; or
42
(I) Title 69, Chapter 2, Part 4, Prepaid Wireless Telecommunications Service
43
Charges; or
44
(ii) another amount that by statute is subject to a penalty imposed under this section.
45
(b) "Tax, fee, or charge" does not include a tax, fee, or charge imposed under:
46
(i) Title 41, Chapter 1a, Motor Vehicle Act, except for Section 41-1a-301;
47
(ii) Title 41, Chapter 3, Motor Vehicle Business Regulation Act;
48
(iii) Chapter 2, Property Tax Act, except for Section 59-2-1309;
49
(iv) Chapter 3, Tax Equivalent Property Act; or
50
(v) Chapter 4, Privilege Tax.
51
(2)(a) The due date for filing a return is:
52
(i) if the person filing the return is not allowed by law an extension of time for filing
53
the return, the day on which the return is due as provided by law; or
54
(ii) if the person filing the return is allowed by law an extension of time for filing the
55
return, the earlier of:
56
(A) the date the person files the return; or
57
(B) the last day of that extension of time as allowed by law.
58
(b) A penalty in the amount described in Subsection (2)(c) is imposed if a person files a
59
return after the due date described in Subsection (2)(a).
60
(c) For purposes of Subsection (2)(b), the penalty is an amount equal to the greater of:
61
(i) $20; or
62
(ii)(A) 2% of the unpaid tax, fee, or charge due on the return if the return is filed
- 2 - 01-24 11:24 1st Sub. (Buff) H.B. 61
63
no later than five days after the due date described in Subsection (2)(a);
64
(B) 5% of the unpaid tax, fee, or charge due on the return if the return is filed
65
more than five days after the due date but no later than 15 days after the due
66
date described in Subsection (2)(a); or
67
(C) 10% of the unpaid tax, fee, or charge due on the return if the return is filed
68
more than 15 days after the due date described in Subsection (2)(a).
69
(d) This Subsection (2) does not apply to:
70
(i) an amended return; or
71
(ii) a return with no tax due.
72
(3)(a) Except as provided in Subsection (15), a person is subject to a penalty for failure
73
to pay a tax, fee, or charge if:
74
(i) the person files a return on or before the due date for filing a return described in
75
Subsection (2)(a), but fails to pay the tax, fee, or charge due on the return on or
76
before that due date;
77
(ii) the person:
78
(A) is subject to a penalty under Subsection (2)(b); and
79
(B) fails to pay the tax, fee, or charge due on a return within a 90-day period after
80
the due date for filing a return described in Subsection (2)(a);
81
(iii)(A) the person is subject to a penalty under Subsection (2)(b); and
82
(B) the commission estimates an amount of tax due for that person in accordance
83
with Subsection 59-1-1406(2);
84
(iv) the person:
85
(A) is mailed a notice of deficiency; and
86
(B) within a 30-day period after the day on which the notice of deficiency
87
described in Subsection (3)(a)(iv)(A) is mailed:
88
(I) does not file a petition for redetermination or a request for agency action;
89
and
90
(II) fails to pay the tax, fee, or charge due on a return;
91
(v)(A) the commission:
92
(I) issues an order constituting final agency action resulting from a timely filed
93
petition for redetermination or a timely filed request for agency action; or
94
(II) is considered to have denied a request for reconsideration under Subsection
95
63G-4-302(3)(b) resulting from a timely filed petition for redetermination
96
or a timely filed request for agency action; and
- 3 - 1st Sub. (Buff) H.B. 61 01-24 11:24
97
(B) the person fails to pay the tax, fee, or charge due on a return within a 30-day
98
period after the date the commission:
99
(I) issues the order constituting final agency action described in Subsection
100
(3)(a)(v)(A)(I); or
101
(II) is considered to have denied the request for reconsideration described in
102
Subsection (3)(a)(v)(A)(II); or
103
(vi) the person fails to pay the tax, fee, or charge within a 30-day period after the date
104
of a final judicial decision resulting from a timely filed petition for judicial review.
105
(b) For purposes of Subsection (3)(a), the penalty is an amount equal to the greater of:
106
(i) $20; or
107
(ii)(A) 2% of the unpaid tax, fee, or charge due on the return if the activated tax,
108
fee, or charge due on the return is paid no later than five days after the due date
109
for filing a return described in Subsection (2)(a);
110
(B) 5% of the unpaid tax, fee, or charge due on the return if the activated tax, fee,
111
or charge due on the return is paid more than five days after the due date for
112
filing a return described in Subsection (2)(a) but no later than 15 days after that
113
due date; or
114
(C) 10% of the unpaid tax, fee, or charge due on the return if the activated tax, fee,
115
or charge due on the return is paid more than 15 days after the due date for
116
filing a return described in Subsection (2)(a).
117
(4)(a) In the case of any underpayment of estimated tax or quarterly installments
118
required by Sections 59-5-107, 59-5-207, 59-7-504, and 59-9-104, there shall be
119
added a penalty in an amount determined by applying the interest rate provided under
120
Section 59-1-402 plus four percentage points to the amount of the underpayment for
121
the period of the underpayment.
122
(b)(i) For purposes of Subsection (4)(a), the amount of the underpayment shall be the
123
excess of the required installment over the amount, if any, of the installment paid
124
on or before the due date for the installment.
125
(ii) The period of the underpayment shall run from the due date for the installment to
126
whichever of the following dates is the earlier:
127
(A) the original due date of the tax return, without extensions, for the taxable year;
128
or
129
(B) with respect to any portion of the underpayment, the date on which that
130
portion is paid.
- 4 - 01-24 11:24 1st Sub. (Buff) H.B. 61
131
(iii) For purposes of this Subsection (4), a payment of estimated tax shall be credited
132
against unpaid required installments in the order in which the installments are
133
required to be paid.
134
(5)(a) Notwithstanding Subsection (2) and except as provided in Subsection (6), a
135
person allowed by law an extension of time for filing a corporate franchise or income
136
tax return under Chapter 7, Corporate Franchise and Income Taxes, or an individual
137
income tax return under Chapter 10, Individual Income Tax Act, is subject to a
138
penalty in the amount described in Subsection (5)(b) if, on or before the day on
139
which the return is due as provided by law, not including the extension of time, the
140
person fails to pay:
141
(i) for a person filing a corporate franchise or income tax return under Chapter 7,
142
Corporate Franchise and Income Taxes, the payment required by Subsection
143
59-7-507(1)(b); or
144
(ii) for a person filing an individual income tax return under Chapter 10, Individual
145
Income Tax Act, the payment required by Subsection 59-10-516(2).
146
(b) For purposes of Subsection (5)(a), the penalty per month during the period of the
147
extension of time for filing the return is an amount equal to 2% of the tax due on the
148
return, unpaid as of the day on which the return is due as provided by law.
149
(6) If a person does not file a return within an extension of time allowed by Section
150
59-7-505 or 59-10-516, the person:
151
(a) is not subject to a penalty in the amount described in Subsection (5)(b); and
152
(b) is subject to a penalty in an amount equal to the sum of:
153
(i) a late file penalty in an amount equal to the greater of:
154
(A) $20; or
155
(B) 10% of the tax due on the return, unpaid as of the day on which the return is
156
due as provided by law, not including the extension of time; and
157
(ii) a late pay penalty in an amount equal to the greater of:
158
(A) $20; or
159
(B) 10% of the unpaid tax due on the return, unpaid as of the day on which the
160
return is due as provided by law, not including the extension of time.
161
(7)(a) Additional penalties for an underpayment of a tax, fee, or charge are as provided
162
in this Subsection (7)(a).
163
(i) Except as provided in Subsection (7)(c), if any portion of an underpayment of a
164
tax, fee, or charge is due to negligence, the penalty is 10% of the portion of the
- 5 - 1st Sub. (Buff) H.B. 61 01-24 11:24
165
underpayment that is due to negligence.
166
(ii) Except as provided in Subsection (7)(d), if any portion of an underpayment of a
167
tax, fee, or charge is due to intentional disregard of law or rule, the penalty is 15%
168
of the entire underpayment.
169
(iii) If any portion of an underpayment is due to an intent to evade a tax, fee, or
170
charge, the penalty is the greater of $500 per period or 50% of the entire
171
underpayment.
172
(iv) If any portion of an underpayment is due to fraud with intent to evade a tax, fee,
173
or charge, the penalty is the greater of $500 per period or 100% of the entire
174
underpayment.
175
(b) If the commission determines that a person is liable for a penalty imposed under
176
Subsection (7)(a)(ii), (iii), or (iv), the commission shall notify the person of the
177
proposed penalty.
178
(i) The notice of proposed penalty shall:
179
(A) set forth the basis of the assessment; and
180
(B) be mailed by certified mail, postage prepaid, to the person's last-known
181
address.
182
(ii) Upon receipt of the notice of proposed penalty, the person against whom the
183
penalty is proposed may:
184
(A) pay the amount of the proposed penalty at the place and time stated in the
185
notice; or
186
(B) proceed in accordance with the review procedures of Subsection (7)(b)(iii).
187
(iii) A person against whom a penalty is proposed in accordance with this Subsection
188
(7) may contest the proposed penalty by filing a petition for an adjudicative
189
proceeding with the commission.
190
(iv)(A) If the commission determines that a person is liable for a penalty under
191
this Subsection (7), the commission shall assess the penalty and give notice and
192
demand for payment.
193
(B) The commission shall mail the notice and demand for payment described in
194
Subsection (7)(b)(iv)(A):
195
(I) to the person's last-known address; and
196
(II) in accordance with Section 59-1-1404.
197
(c) A seller that voluntarily collects a tax under Subsection 59-12-107(2)(d) is not
198
subject to the penalty under Subsection (7)(a)(i) if on or after July 1, 2001:
- 6 - 01-24 11:24 1st Sub. (Buff) H.B. 61
199
(i) a court of competent jurisdiction issues a final unappealable judgment or order
200
determining that:
201
(A) the seller meets one or more of the criteria described in Subsection 59-12-107
202
(2)(a) or is a seller required to pay or collect and remit sales and use taxes
203
under Subsection 59-12-107(2)(b) or (2)(c); and
204
(B) the commission or a county, city, or town may require the seller to collect a
205
tax under Subsections 59-12-103(2)(a) through (e); or
206
(ii) the commission issues a final unappealable administrative order determining that:
207
(A) the seller meets one or more of the criteria described in Subsection 59-12-107
208
(2)(a) or is a seller required to pay or collect and remit sales and use taxes
209
under Subsection 59-12-107(2)(b) or (2)(c); and
210
(B) the commission or a county, city, or town may require the seller to collect a
211
tax under Subsections 59-12-103(2)(a) through (e).
212
(d) A seller that voluntarily collects a tax under Subsection 59-12-107(2)(d) is not
213
subject to the penalty under Subsection (7)(a)(ii) if:
214
(i)(A) a court of competent jurisdiction issues a final unappealable judgment or
215
order determining that:
216
(I) the seller meets one or more of the criteria described in Subsection
217
59-12-107(2)(a) or is a seller required to pay or collect and remit sales and
218
use taxes under Subsection 59-12-107(2)(b) or (2)(c); and
219
(II) the commission or a county, city, or town may require the seller to collect a
220
tax under Subsections 59-12-103(2)(a) through (e); or
221
(B) the commission issues a final unappealable administrative order determining
222
that:
223
(I) the seller meets one or more of the criteria described in Subsection
224
59-12-107(2)(a) or is a seller required to pay or collect and remit sales and
225
use taxes under Subsection 59-12-107(2)(b) or (2)(c); and
226
(II) the commission or a county, city, or town may require the seller to collect a
227
tax under Subsections 59-12-103(2)(a) through (e); and
228
(ii) the seller's intentional disregard of law or rule is warranted by existing law or by
229
a nonfrivolous argument for the extension, modification, or reversal of existing
230
law or the establishment of new law.
231
(8)(a) Subject to Subsections (8)(b) and (c), the penalty for failure to file an information
232
return, information report, or a complete supporting schedule is $50 for each
- 7 - 1st Sub. (Buff) H.B. 61 01-24 11:24
233
information return, information report, or supporting schedule up to a maximum of
234
$1,000.
235
(b) If an employer is subject to a penalty under Subsection (13), the employer may not
236
be subject to a penalty under Subsection (8)(a).
237
(c) If an employer is subject to a penalty under this Subsection (8) for failure to file a
238
return in accordance with Subsection 59-10-406(3) on or before the due date
239
described in Subsection 59-10-406(3)(b)(ii), the commission may not impose a
240
penalty under this Subsection (8) unless the return is filed more than 14 days after the
241
due date described in Subsection 59-10-406(3)(b)(ii).
242
(9) If a person, in furtherance of a frivolous position, has a prima facie intent to delay or
243
impede administration of a law relating to a tax, fee, or charge and files a purported
244
return that fails to contain information from which the correctness of reported tax, fee, or
245
charge liability can be determined or that clearly indicates that the tax, fee, or charge
246
liability shown is substantially incorrect, the penalty is $500.
247
(10)(a) A seller that fails to remit a tax, fee, or charge monthly as required by Subsection
248
59-12-108(1)(a):
249
(i) is subject to a penalty described in Subsection (2); and
250
(ii) may not retain the percentage of sales and use taxes that would otherwise be
251
allowable under Subsection 59-12-108(2).
252
(b) A seller that fails to remit a tax, fee, or charge by electronic funds transfer as
253
required by Subsection 59-12-108(1)(a)(ii)(B):
254
(i) is subject to a penalty described in Subsection (2); and
255
(ii) may not retain the percentage of sales and use taxes that would otherwise be
256
allowable under Subsection 59-12-108(2).
257
(11)(a) A person is subject to the penalty provided in Subsection (11)(c) if that person:
258
(i) commits an act described in Subsection (11)(b) with respect to one or more of the
259
following documents:
260
(A) a return;
261
(B) an affidavit;
262
(C) a claim; or
263
(D) a document similar to Subsections (11)(a)(i)(A) through (C);
264
(ii) knows or has reason to believe that the document described in Subsection
265
(11)(a)(i) will be used in connection with any material matter administered by the
266
commission; and
- 8 - 01-24 11:24 1st Sub. (Buff) H.B. 61
267
(iii) knows that the document described in Subsection (11)(a)(i), if used in connection
268
with any material matter administered by the commission, would result in an
269
understatement of another person's liability for a tax, fee, or charge.
270
(b) The following acts apply to Subsection (11)(a)(i):
271
(i) preparing any portion of a document described in Subsection (11)(a)(i);
272
(ii) presenting any portion of a document described in Subsection (11)(a)(i);
273
(iii) procuring any portion of a document described in Subsection (11)(a)(i);
274
(iv) advising in the preparation or presentation of any portion of a document
275
described in Subsection (11)(a)(i);
276
(v) aiding in the preparation or presentation of any portion of a document described
277
in Subsection (11)(a)(i);
278
(vi) assisting in the preparation or presentation of any portion of a document
279
described in Subsection (11)(a)(i); or
280
(vii) counseling in the preparation or presentation of any portion of a document
281
described in Subsection (11)(a)(i).
282
(c) For purposes of Subsection (11)(a), the penalty:
283
(i) shall be imposed by the commission;
284
(ii) is $500 for each document described in Subsection (11)(a)(i) with respect to
285
which the person described in Subsection (11)(a) meets the requirements of
286
Subsection (11)(a); and
287
(iii) is in addition to any other penalty provided by law.
288
(d) The commission may seek a court order to enjoin a person from engaging in conduct
289
that is subject to a penalty under this Subsection (11).
290
(e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
291
commission may make rules prescribing the documents that are similar to
292
Subsections (11)(a)(i)(A) through (C).
293
(12)(a) Criminal offenses and penalties are provided in Subsections (12)(b) through (e).
294
(b)(i) A person who is required by this title or any laws the commission administers
295
or regulates to register with or obtain a license or permit from the commission,
296
who operates without having registered or secured a license or permit, or who
297
operates when the registration, license, or permit is expired or not current, is guilty
298
of a class B misdemeanor.
299
(ii) Notwithstanding Section 76-3-301, for purposes of Subsection (12)(b)(i), the
300
penalty may not:
- 9 - 1st Sub. (Buff) H.B. 61 01-24 11:24
301
(A) be less than $500; or
302
(B) exceed $1,000.
303
(c)(i) With respect to a tax, fee, or charge, a person who knowingly and intentionally,
304
and without a reasonable good faith basis, fails to make, render, sign, or verify a
305
return within the time required by law or to supply information within the time
306
required by law, or who makes, renders, signs, or verifies a false or fraudulent
307
return or statement, or who supplies false or fraudulent information, is guilty of a
308
third degree felony.
309
(ii) Notwithstanding Section 76-3-301, for purposes of Subsection (12)(c)(i), the
310
penalty may not:
311
(A) be less than $1,000; or
312
(B) exceed $5,000.
313
(d)(i) A person who intentionally or willfully attempts to evade or defeat a tax, fee, or
314
charge or the payment of a tax, fee, or charge is, in addition to other penalties
315
provided by law, guilty of a second degree felony.
316
(ii) Notwithstanding Section 76-3-301, for purposes of Subsection (12)(d)(i), the
317
penalty may not:
318
(A) be less than $1,500; or
319
(B) exceed $25,000.
320
(e)(i) A person is guilty of a second degree felony if that person commits an act:
321
(A) described in Subsection (12)(e)(ii) with respect to one or more of the
322
following documents:
323
(I) a return;
324
(II) an affidavit;
325
(III) a claim; or
326
(IV) a document similar to Subsections (12)(e)(i)(A)(I) through (III); and
327
(B) subject to Subsection (12)(e)(iii), with knowledge that the document described
328
in Subsection (12)(e)(i)(A):
329
(I) is false or fraudulent as to any material matter; and
330
(II) could be used in connection with any material matter administered by the
331
commission.
332
(ii) The following acts apply to Subsection (12)(e)(i):
333
(A) preparing any portion of a document described in Subsection (12)(e)(i)(A);
334
(B) presenting any portion of a document described in Subsection (12)(e)(i)(A);
- 10 - 01-24 11:24 1st Sub. (Buff) H.B. 61
335
(C) procuring any portion of a document described in Subsection (12)(e)(i)(A);
336
(D) advising in the preparation or presentation of any portion of a document
337
described in Subsection (12)(e)(i)(A);
338
(E) aiding in the preparation or presentation of any portion of a document
339
described in Subsection (12)(e)(i)(A);
340
(F) assisting in the preparation or presentation of any portion of a document
341
described in Subsection (12)(e)(i)(A); or
342
(G) counseling in the preparation or presentation of any portion of a document
343
described in Subsection (12)(e)(i)(A).
344
(iii) This Subsection (12)(e) applies:
345
(A) regardless of whether the person for which the document described in
346
Subsection (12)(e)(i)(A) is prepared or presented:
347
(I) knew of the falsity of the document described in Subsection (12)(e)(i)(A); or
348
(II) consented to the falsity of the document described in Subsection
349
(12)(e)(i)(A); and
350
(B) in addition to any other penalty provided by law.
351
(iv) Notwithstanding Section 76-3-301, for purposes of this Subsection (12)(e), the
352
penalty may not:
353
(A) be less than $1,500; or
354
(B) exceed $25,000.
355
(v) The commission may seek a court order to enjoin a person from engaging in
356
conduct that is subject to a penalty under this Subsection (12)(e).
357
(vi) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
358
the commission may make rules prescribing the documents that are similar to
359
Subsections (12)(e)(i)(A)(I) through (III).
360
(f) The statute of limitations for prosecution for a violation of this Subsection (12) is the
361
later of six years:
362
(i) from the date the tax should have been remitted; or
363
(ii) after the day on which the person commits the criminal offense.
364
(13)(a) Subject to Subsection (13)(b), an employer that is required to file a form with the
365
commission in accordance with Subsection 59-10-406(8) or (9) is subject to a penalty
366
described in Subsection (13)(b) if the employer:
367
(i) fails to file the form with the commission in an electronic format approved by the
368
commission as required by Subsection 59-10-406(8) or (9);
- 11 - 1st Sub. (Buff) H.B. 61 01-24 11:24
369
(ii) fails to file the form on or before the due date provided in Subsection 59-10-406
370
(8) or (9);
371
(iii) fails to provide accurate information on the form; or
372
(iv) fails to provide all of the information required by the Internal Revenue Service to
373
be contained on the form.
374
(b) For purposes of Subsection (13)(a), the penalty is:
375
(i) $30 per form, not to exceed $75,000 in a calendar year, if the employer files the
376
form in accordance with Subsection 59-10-406(8) or (9), more than 14 days after
377
the due date provided in Subsection 59-10-406(8) or (9) but no later than 30 days
378
after the due date provided in Subsection 59-10-406(8) or (9);
379
(ii) $60 per form, not to exceed $200,000 in a calendar year, if the employer files the
380
form in accordance with Subsection 59-10-406(8) or (9), more than 30 days after
381
the due date provided in Subsection 59-10-406(8) or (9) but on or before June 1; or
382
(iii) $100 per form, not to exceed $500,000 in a calendar year, if the employer:
383
(A) files the form in accordance with Subsection 59-10-406(8) or (9) after June 1;
384
or
385
(B) fails to file the form.
386
(c) A producer that is required to file a form with the commission in accordance with
387
Subsection 59-6-103(3) is subject to a penalty described in Subsection (13)(d) if the
388
producer:
389
(i) fails to file the form with the commission in the format approved by the
390
commission as required by Subsection 59-6-103(3);
391
(ii) fails to file the form on or before the due date provided in Subsection 59-6-103(3);
392
(iii) fails to provide accurate information on the form; or
393
(iv) fails to provide all of the information required by the Internal Revenue Service to
394
be contained on the form.
395
(d) For purposes of Subsection (13)(c), the penalty is:
396
(i) $30 per form, not to exceed $75,000 in a calendar year, if the producer files the
397
form in accordance with Subsection 59-6-103(3), more than 14 days, but no later
398
than 60 days, after the due date provided in Subsection 59-6-103(3);
399
(ii) $60 per form, not to exceed $200,000 in a calendar year, if the producer files the
400
form in accordance with Subsection 59-6-103(3), more than 60 days after the due
401
date provided in Subsection 59-6-103(3) but on or before June 1; or
402
(iii) $100 per form, not to exceed $500,000 in a calendar year, if the producer:
- 12 - 01-24 11:24 1st Sub. (Buff) H.B. 61
403
(A) files the form in accordance with Subsection 59-6-103(3) after June 1; or
404
(B) fails to file the form.
405
(14) Upon making a record of the commission's actions, and upon reasonable cause shown,
406
the commission may waive, reduce, or compromise any of the penalties or interest
407
imposed under this part.
408
(15) Failure to pay a tax described in Subsection 59-10-1403.2(2) shall be subject to a
409
penalty as described in Subsection (3) except that the penalty shall be:
410
(a) assessed only if the pass-through entity reports tax paid on a Utah Schedule K-1 but
411
does not pay some or all of the tax reported; and
412
(b) calculated based on the difference between the amount of tax reported and the
413
amount of tax paid.
414
Section 2. Section 59-6-102 is amended to read:
415
59-6-102 . Producer's obligation to deduct and withhold payments -- Amount --
416
Exempt payments -- Credit against tax.
417
(1) Except as provided in Subsection (2), each producer shall deduct and withhold from
418
each payment being made to any person in respect to production of minerals in this state,
419
but not including that to which the producer is entitled, an amount equal to [5% of] the
420
product of:
421
(a) the percentage listed in Subsection 59-10-104(2)(b); and
422
(b) the amount [which] that would have otherwise been payable to the person entitled to
423
the payment.
424
(2) The obligation to deduct and withhold from payments as provided in Subsection (1)
425
does not apply to those payments [which] that are payable to:
426
(a) the United States, this state, or an agency or political subdivision of the United States
427
or this state;
428
(b) an organization that is exempt from the taxes imposed by Chapter 7, Corporate
429
Franchise and Income Taxes, in accordance with Subsection 59-7-102(1)(a);
430
(c) an Indian or Indian tribe if the amounts accruing are subject to the supervision of the
431
United States or an agency of the United States; or
432
(d) a business entity that files an exemption certificate in accordance with Section
433
59-6-102.1.
434
(3) A claimant, estate, or trust that files a tax return with the commission may claim a
435
refundable tax credit against the tax reflected on the tax return for the amount withheld
436
by the producer under Subsection (1).
- 13 - 1st Sub. (Buff) H.B. 61 01-24 11:24
437
Section 3. Section 59-6-103 is amended to read:
438
59-6-103 . Returns and payments required of producers.
439
(1)(a) Subject to Subsection (1)(b), a producer required to deduct and withhold an
440
amount under this chapter shall file a withholding return with the commission:
441
(i) for the amounts required to be deducted and withheld under this chapter during the
442
preceding calendar quarter; [and]
443
(ii) in an electronic format [ prescribed] approved by the commission[.] ; and
444
(iii) that contains any information the commission requires.
445
(b) A withholding return described in Subsection (1)(a) is due on or before the last day
446
of April, July, October, and January.
447
(c)(i) Each producer shall file an annual return containing the information that the
448
commission requires.
449
(ii) The producer shall file the annual return:
450
(A) in an electronic format the commission approves; and
451
(B) on or before January 31 of the year following that for which the return is made.
452
[(c) A withholding return described in Subsection (1)(a) shall contain:]
453
[(i) the name and address of each person receiving a payment subject to the deduction
454
and withholding requirements of this chapter for the calendar quarter for which
455
the withholding return is filed;]
456
[(ii) for each person described in Subsection (1)(c)(i), the amount of payment the
457
person would have received from the production of minerals by the producer had
458
the deduction and withholding required by this chapter not been made for the
459
calendar quarter for which the withholding return is filed;]
460
[(iii) for each person described in Subsection (1)(c)(i), the amount of deduction and
461
withholding under this chapter for the calendar quarter for which the withholding
462
return is filed;]
463
[(iv) the name or description of the property from which the production of minerals
464
occurs that results in a payment subject to deduction and withholding under this
465
chapter; and]
466
[(v) for each person described in Subsection (1)(c)(i), the interest of the person in the
467
production of minerals that results in a payment subject to deduction and
468
withholding under this chapter.]
469
(2)(a) If a producer receives an exemption certificate filed in accordance with Section
470
59-6-102.1 from a business entity, the producer shall file a withholding return with
- 14 - 01-24 11:24 1st Sub. (Buff) H.B. 61
471
the commission:
472
(i) [on a form prescribed by the commission] in a format the commission approves;
473
and
474
(ii) on or before the January 31 following the last day of the taxable year for which
475
the producer receives the exemption certificate from the business entity.
476
(b) The withholding return required by Subsection (2)(a) shall contain:
477
(i) the name and address of the business entity that files the exemption certificate in
478
accordance with Section 59-6-102.1;
479
(ii) the amount of the payment made by the producer to the business entity that would
480
have been subject to deduction and withholding under this chapter had the
481
business entity not filed the exemption certificate in accordance with Section
482
59-6-102.1;
483
(iii) the name or description of the property from which the production of minerals
484
occurs that would have resulted in a payment subject to deduction and
485
withholding under this chapter had the business entity not filed the exemption
486
certificate in accordance with Section 59-6-102.1; and
487
(iv) the interest of the business entity in the production of minerals that would have
488
resulted in a payment subject to deduction and withholding under this chapter had
489
the business entity not filed the exemption certificate in accordance with Section
490
59-6-102.1.
491
(3)(a) Subject to Subsections (3)(b) and (c), the commission shall require a producer that
492
issues the following forms for a taxable year to file the forms with the commission in
493
an electronic format approved by the commission:
494
(i) a federal Form 1099 filed for purposes of withholding under Section 59-6-103; or
495
(ii) a federal form substantially similar to a form described in Subsection (3)(a)(i) if
496
designated by the commission in accordance with Subsection (3)(d).
497
(b) A producer that is required to file a form with the commission in accordance with
498
Subsection (3)(a) shall file the form on or before January 31.
499
(c) A producer that is required to file a form with the commission in accordance with
500
Subsection (3)(a) shall provide:
501
(i) accurate information on the form; and
502
(ii) all of the information required by the Internal Revenue Service to be contained on
503
the form.
504
(d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
- 15 - 1st Sub. (Buff) H.B. 61 01-24 11:24
505
purposes of Subsection (3)(a), the commission may designate a federal form as being
506
substantially similar to a form described in Subsection (3)(a)(i) if:
507
(i) for purposes of federal individual income taxes, a different federal form contains
508
substantially similar information to a form described in Subsection (3)(a)(i); or
509
(ii) the Internal Revenue Service replaces a form described in Subsection (3)(a)(i)
510
with a different federal form.
511
Section 4. Effective date.
512
This bill takes effect for a taxable year beginning on or after January 1, 2026.
- 16 -