01-23 17:11 1st Sub. (Green) S.B. 85
Lincoln Fillmore proposes the following substitute bill:
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Income Tax Rate Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Lincoln Fillmore
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LONG TITLE
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General Description:
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This bill modifies the income tax rate.
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Highlighted Provisions:
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This bill:
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▸ defines terms;
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▸ provides for a reduction of the income tax rate when the actual state revenue exceeds the
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forecast revenue;
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▸ provides a formula and process for calculating a reduction of the income tax rate;
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▸ requires the State Tax Commission to annually publish the income tax rate;
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▸ changes the mineral production tax withholding rate; and
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▸ makes technical and conforming changes.
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Money Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill provides a special effective date.
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Utah Code Sections Affected:
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AMENDS:
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59-1-101, as last amended by Laws of Utah 2009, Chapter 212
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59-6-102, as last amended by Laws of Utah 2008, Chapter 255
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59-7-104, as last amended by Laws of Utah 2024, Chapter 255
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59-7-201, as last amended by Laws of Utah 2024, Chapter 255
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59-7-610, as last amended by Laws of Utah 2021, Chapter 367
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59-10-104, as last amended by Laws of Utah 2024, Chapter 255
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59-10-116, as last amended by Laws of Utah 2022, Chapter 252
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59-10-201, as last amended by Laws of Utah 2010, Chapter 6
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59-10-205, as last amended by Laws of Utah 2008, Chapter 389
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59-10-1007, as last amended by Laws of Utah 2021, Chapter 367 1st Sub. (Green) S.B. 85 01-23 17:11
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59-10-1017, as last amended by Laws of Utah 2021, Chapters 367, 370
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59-10-1022, as last amended by Laws of Utah 2021, Chapter 367
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59-10-1023, as last amended by Laws of Utah 2021, Chapter 367
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59-10-1028, as last amended by Laws of Utah 2021, Chapter 367
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59-10-1035, as last amended by Laws of Utah 2021, Chapter 367
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59-10-1036, as last amended by Laws of Utah 2021, Chapter 367
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59-10-1042, as last amended by Laws of Utah 2023, Chapter 459
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59-10-1043, as last amended by Laws of Utah 2022, Chapter 258
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59-10-1403.2, as last amended by Laws of Utah 2023, Chapter 470
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59-10-1403.3, as last amended by Laws of Utah 2021, Chapter 367
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63I-1-259, as last amended by Laws of Utah 2024, Third Special Session, Chapter 5
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ENACTS:
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59-1-1801, Utah Code Annotated 1953
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59-1-1802, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1. Section 59-1-101 is amended to read:
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59-1-101 . Definitions.
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As used in this title:
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(1) "Commission" and "tax commission" mean the State Tax Commission.
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(2) "Deficiency" [is as] means the same as that term is defined in Section 59-1-1402.
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(3) "Income tax rate" means:
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(a) for a taxable year beginning on or after January 1, 2026, and on or before January 1,
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2027, 4.55%;
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(b) for a taxable year beginning on or after January 1, 2027, and before January 1, 2037,
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the rate calculated and published in accordance with Section 59-1-1802; and
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(c) for a taxable year beginning on or after January 1, 2037, the rate that is in effect on
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the first day of the taxable year beginning on or after January 1, 2036, and beginning
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before January 1, 2037.
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Section 2. Section 59-1-1801 is enacted to read:
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Part 18. Income Tax Rate
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59-1-1801 . Definitions.
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(1) "Consensus entities" means:
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(a) the Office of the Legislative Fiscal Analyst;
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(b) the commission; and
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(c) the Governor's Office of Planning and Budget.
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(2) "Forecast revenue" means state revenue of:
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(a) for the fiscal year ending June 30, 2026, $13,237,500,000;
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(b) for the fiscal year ending June 30, 2027, $13,916,795,000;
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(c) for the fiscal year ending June 30, 2028, $14,623,268,000;
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(d) for the fiscal year ending June 30, 2029, $15,357,351,000;
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(e) for the fiscal year ending June 30, 2030, $16,120,271,000;
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(f) for the fiscal year ending June 30, 2031, $16,914,872,000;
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(g) for the fiscal year ending June 30, 2032, $17,744,730,000;
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(h) for the fiscal year ending June 30, 2033, $18,614,316,000;
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(i) for the fiscal year ending June 30, 2034, $19,523,292,000; and
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(j) for the fiscal year ending June 30, 2035, $20,475,118,000.
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(3) "State revenue" means unrestricted revenue generated from:
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(a) liquor markups required by Section 32B-2-304;
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(b) earnings on investment of state money deposited into the General Fund under
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Section 51-7-4;
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(c) severance tax imposed under Chapter 5, Severance Tax on Oil, Gas, and Mining;
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(d) mineral production tax withholding required by Chapter 6, Mineral Production Tax
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Withholding;
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(e) income tax imposed under Chapter 7, Corporate Franchise and Income Taxes, and
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Chapter 10, Individual Income Tax Act;
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(f) premiums tax imposed under Chapter 9, Taxation of Admitted Insurers;
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(g) inheritance tax imposed under Chapter 11, Inheritance Tax Act;
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(h) state sales and use tax imposed under Chapter 12, Sales and Use Tax Act;
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(i) taxes imposed under Chapter 13, Motor and Special Fuel Tax Act;
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(j) tax imposed on cigarettes and tobacco under Chapter 14, Cigarette and Tobacco Tax
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and Licensing Act;
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(k) beer tax imposed under Chapter 15, Beer Tax;
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(l) mineral lease funds described in Chapter 21, Mineral Lease Funds;
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(m) multi-channel video or audio service tax imposed under Section 59-26-103; and
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(n) other payments to the General Fund or Income Tax Fund, including fees, surcharges,
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penalties, interest, lapsing funds, rebates, and settlements.
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(4) "Unrestricted revenue" means revenue that is not statutorily dedicated or earmarked for
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a particular use.
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Section 3. Section 59-1-1802 is enacted to read:
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59-1-1802 . Calculation of income tax rate.
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(1)(a) On or after July 1 and before September 1 of each year between 2026 and 2035,
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the consensus entities shall determine whether the actual state revenue for the
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previous fiscal year exceeds the forecast revenue for the previous fiscal year.
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(b)(i) If the consensus entities determine that the actual state revenue for the previous
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fiscal year exceeds the forecast revenue for the previous fiscal year, the income
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tax rate for the taxable year that begins on or after the next January 1 decreases,
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subject to Subsections (1)(b)(ii) and (1)(b)(iii), to a rate projected to reduce
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income tax revenue by an amount equal to one half of the difference between
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actual state revenue for the previous fiscal year and forecast revenue for the
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previous fiscal year.
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(ii) The income tax rate decreases only if the rate projected to reduce income tax
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revenue by one-half of the difference between actual state revenue for the
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previous fiscal year and forecast revenue for the previous year is at least .01%
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lower than the income tax rate in effect for the taxable year in which the
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consensus entities make the determination.
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(iii) The income tax rate shall be rounded to the second decimal place.
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(c) If the consensus entities determine that the actual state revenue for the previous fiscal
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year does not exceed the forecast revenue for the previous fiscal year, the income tax
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rate for the taxable year beginning on or after the next January 1 remains the same as
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the income tax rate for the current taxable year.
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(2) On or before November 1, the commission shall publish the income tax rate for the
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taxable year beginning on or after the next January 1.
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Section 4. Section 59-6-102 is amended to read:
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59-6-102 . Producer's obligation to deduct and withhold payments -- Amount --
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Exempt payments -- Credit against tax.
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[(1) Except as provided in Subsection (2), each producer shall deduct and withhold from
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each payment being made to any person in respect to production of minerals in this state,
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but not including that to which the producer is entitled, an amount equal to 5% of the
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amount which would have otherwise been payable to the person entitled to the payment.]
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(1) Except as provided in Subsection (2), each producer shall deduct and withhold from
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each payment being made to any person in respect to production of minerals in this state,
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but not including the payment to which the producer is entitled, an amount equal to the
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income tax rate multiplied by the amount payable to the person entitled to the payment.
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(2) The obligation to deduct and withhold from payments as provided in Subsection (1)
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does not apply to those payments [which] that are payable to:
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(a) the United States, this state, or an agency or political subdivision of the United States
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or this state;
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(b) an organization that is exempt from the taxes imposed by Chapter 7, Corporate
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Franchise and Income Taxes, in accordance with Subsection 59-7-102(1)(a);
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(c) an Indian or Indian tribe if the amounts accruing are subject to the supervision of the
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United States or an agency of the United States; or
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(d) a business entity that files an exemption certificate in accordance with Section
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59-6-102.1.
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(3) A claimant, estate, or trust that files a tax return with the commission may claim a
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refundable tax credit against the tax reflected on the tax return for the amount withheld
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by the producer under Subsection (1).
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Section 5. Section 59-7-104 is amended to read:
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59-7-104 . Tax -- Minimum tax.
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(1) Each domestic and foreign corporation, except a corporation that is exempt under
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Section 59-7-102, shall pay an annual tax to the state based on the corporation's Utah
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taxable income for the taxable year for the privilege of exercising the corporation's
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corporate franchise or for the privilege of doing business in the state.
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[(2) The tax shall be 4.55% of a corporation's Utah taxable income.]
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(2) The tax imposed by Subsection (1) is the amount calculated by multiplying a
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corporation's Utah taxable income by the income tax rate.
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(3) The minimum tax a corporation shall pay under this chapter is $100.
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Section 6. Section 59-7-201 is amended to read:
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59-7-201 . Tax -- Minimum tax.
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(1) There is imposed upon each corporation, except a corporation that is exempt under
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Section 59-7-102, a tax upon the corporation's Utah taxable income for the taxable year
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that is derived from sources within this state other than income for any period that the
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corporation is required to include in the corporation's tax base under Section 59-7-104.
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[(2) The tax imposed by Subsection (1) shall be 4.55% of a corporation's Utah taxable
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income]
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(2) The tax imposed by Subsection (1) is the amount calculated by multiplying a
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corporation's Utah taxable income by the income tax rate.
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(3) In no case shall the tax be less than $100.
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Section 7. Section 59-7-610 is amended to read:
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59-7-610 . Recycling market development zones tax credits.
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(1) Subject to other provisions of this section, a taxpayer that is a business operating in a
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recycling market development zone as defined in Section 19-13-102 may claim the
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following nonrefundable tax credits:
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(a) a tax credit equal to the product of the [percentage listed in Subsection 59-7-104(2)]
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income tax rate and the purchase price paid for machinery and equipment used
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directly in:
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(i) commercial composting; or
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(ii) manufacturing facilities or plant units that:
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(A) manufacture, process, compound, or produce recycled items of tangible
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personal property for sale; or
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(B) reduce or reuse postconsumer waste material; and
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(b) a tax credit equal to the lesser of:
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(i) 20% of net expenditures to third parties for rent, wages, supplies, tools, test
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inventory, and utilities made by the taxpayer for establishing and operating
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recycling or composting technology in the state; and
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(ii) $2,000.
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(2)(a) To claim a tax credit described in Subsection (1), the taxpayer shall receive from
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the Department of Environmental Quality a written certification, on a form approved
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by the commission, that includes:
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(i) a statement that the taxpayer is operating a business within the boundaries of a
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recycling market development zone;
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(ii) for a claim of the tax credit described in Subsection (1)(a):
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(A) the type of the machinery and equipment that the taxpayer purchased;
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(B) the date that the taxpayer purchased the machinery and equipment;
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(C) the purchase price for the machinery and equipment;
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(D) the total purchase price for all machinery and equipment for which the
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taxpayer is claiming a tax credit;
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(E) a statement that the machinery and equipment are integral to the composting
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or recycling process; and
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(F) the amount of the taxpayer's tax credit; and
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(iii) for a claim of the tax credit described in Subsection (1)(b):
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(A) the type of net expenditure that the taxpayer made to a third party;
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(B) the date that the taxpayer made the payment to a third party;
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(C) the amount that the taxpayer paid to each third party;
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(D) the total amount that the taxpayer paid to all third parties;
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(E) a statement that the net expenditures support the establishment and operation
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of recycling or composting technology in the state; and
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(F) the amount of the taxpayer's tax credit.
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(b)(i) The Department of Environmental Quality shall provide a taxpayer seeking to
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claim a tax credit under Subsection (1) with a copy of the written certification.
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(ii) The taxpayer shall retain a copy of the written certification for the same period of
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time that a person is required to keep books and records under Section 59-1-1406.
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(c) The Department of Environmental Quality shall submit to the commission an
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electronic list that includes:
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(i) the name and identifying information of each taxpayer to which the Department of
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Environmental Quality issues a written certification; and
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(ii) for each taxpayer, the amount of each tax credit listed on the written certification.
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(3) A taxpayer may not claim a tax credit under Subsection (1)(a), Subsection (1)(b), or
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both that exceeds 40% of the taxpayer's state income tax liability as the tax liability is
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calculated:
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(a) for the taxable year in which the taxpayer made the purchases or payments;
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(b) before any other tax credits the taxpayer may claim for the taxable year; and
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(c) before the taxpayer claims a tax credit authorized by this section.
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(4) The commission shall make rules governing what information a taxpayer shall file with
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the commission to verify the entitlement to and amount of a tax credit.
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(5) Except as provided in Subsections (6) through (8), a taxpayer may carry forward, to the
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next three taxable years, the amount of a tax credit described in Subsection (1)(a) that
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the taxpayer does not use for the taxable year.
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(6) A taxpayer may not claim or carry forward a tax credit described in Subsection (1)(a) in
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a taxable year during which the taxpayer claims or carries forward a tax credit under
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Section 63N-2-213.
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(7) A taxpayer may not claim a tax credit described in Subsection (1)(b) in a taxable year
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during which the taxpayer claims or carries forward a tax credit under Section 63N-2-213.
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Section 8. Section 59-10-104 is amended to read:
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59-10-104 . Tax basis -- Tax rate -- Exemption.
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(1) A tax is imposed on the state taxable income of a resident individual as provided in this
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section.
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(2) For purposes of Subsection (1), for a taxable year, the tax is an amount equal to the
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product of:
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(a) the resident individual's state taxable income for that taxable year; and
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[(b) 4.55%.]
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(b) the income tax rate.
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(3) This section does not apply to a resident individual exempt from taxation under Section
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59-10-104.1.
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Section 9. Section 59-10-116 is amended to read:
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59-10-116 . Tax on nonresident individual -- Calculation -- Exemption.
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(1) Except as provided in Subsection (2), a tax is imposed on a nonresident individual in an
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amount equal to the product of[ the]:
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(a) the nonresident individual's state taxable income; and
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(b) [percentage listed in Subsection 59-10-104(2).] the income tax rate.
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(2) This section does not apply to a nonresident individual:
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(a) exempt from taxation under Section 59-10-104.1; or
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(b) whose only state source income is wages that are excluded in accordance with
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Section 59-10-117.5.
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Section 10. Section 59-10-201 is amended to read:
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59-10-201 . Taxation of resident trusts and estates.
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(1) Except as provided in Subsection (2), a tax [determined in accordance with the rate
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prescribed by Subsection 59-10-104(2)(b) ]is imposed for each taxable year on [the state
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taxable income of ]each resident estate or trust in the amount calculated by multiplying
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the resident estate's or trust's state taxable income by the income tax rate.
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(2) The following are not subject to a tax imposed by this part:
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(a) a resident estate or trust that is not required to file a federal income tax return for
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estates and trusts for the taxable year; or
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(b) a resident trust taxed as a corporation.
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(3) A resident estate or trust shall be allowed the credit provided in Section 59-10-1003,
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relating to an income tax imposed by another state, except that the limitation shall be
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computed by reference to the taxable income of the estate or trust.
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(4) The property of the Utah Educational Savings Plan established in Title 53B, Chapter 8a,
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Utah Educational Savings Plan, and [its] the Utah Educational Savings Plan's income
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from operations and investments are exempt from all taxation by the state under this
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chapter.
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Section 11. Section 59-10-205 is amended to read:
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59-10-205 . Tax on nonresident estate or trust.
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(1) Except as provided in Subsection (2), a tax is imposed on a nonresident estate or trust in
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an amount equal to the product of:
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(a) the nonresident estate's or trust's state taxable income as determined under Section
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59-10-204; and
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(b) the [percentage listed in Subsection 59-10-104(2)] income tax rate.
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(2) The following are not subject to a tax imposed by this part:
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(a) a nonresident estate or trust that is not required to file a federal income tax return for
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estates and trusts for the taxable year; or
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(b) a nonresident trust taxed as a corporation.
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Section 12. Section 59-10-1007 is amended to read:
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59-10-1007 . Recycling market development zones tax credits.
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(1) Subject to other provisions of this section, a claimant, estate, or trust in a recycling
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market development zone as defined in Section 19-13-102 may claim the following
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nonrefundable tax credits:
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(a) a tax credit equal to the product of the [percentage listed in Subsection 59-10-104(2)]
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income tax rate and the purchase price paid for machinery and equipment used
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directly in:
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(i) commercial composting; or
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(ii) manufacturing facilities or plant units that:
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(A) manufacture, process, compound, or produce recycled items of tangible
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personal property for sale; or
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(B) reduce or reuse postconsumer waste material; and
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(b) a tax credit equal to the lesser of:
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(i) 20% of net expenditures to third parties for rent, wages, supplies, tools, test
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inventory, and utilities made by the claimant, estate, or trust for establishing and
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operating recycling or composting technology in the state; and
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(ii) $2,000.
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(2)(a) To claim a tax credit described in Subsection (1), the claimant, estate, or trust
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shall receive from the Department of Environmental Quality a written certification,
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on a form approved by the commission, that includes:
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(i) a statement that the claimant, estate, or trust is operating within the boundaries of
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a recycling market development zone;
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(ii) for a claim of the tax credit described in Subsection (1)(a):
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(A) the type of the machinery and equipment that the claimant, estate, or trust
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purchased;
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(B) the date that the claimant, estate, or trust purchased the machinery and
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equipment;
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(C) the purchase price for the machinery and equipment;
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(D) the total purchase price for all machinery and equipment for which the
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claimant, estate, or trust is claiming a tax credit;
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(E) the amount of the claimant's, estate's, or trust's tax credit; and
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(F) a statement that the machinery and equipment are integral to the composting
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or recycling process; and
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(iii) for a claim of the tax credit described in Subsection (1)(b):
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(A) the type of net expenditure that the claimant, estate, or trust made to a third
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party;
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(B) the date that the claimant, estate, or trust made the payment to a third party;
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(C) the amount that the claimant, estate, or trust paid to each third party;
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(D) the total amount that the claimant, estate, or trust paid to all third parties;
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(E) a statement that the net expenditures support the establishment and operation
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of recycling or composting technology in the state; and
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(F) the amount of the claimant's, estate's, or trust's tax credit.
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(b)(i) The Department of Environmental Quality shall provide a claimant, estate, or
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trust seeking to claim a tax credit under Subsection (1) with a copy of the written
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certification.
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(ii) The claimant, estate, or trust shall retain a copy of the written certification for the
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same period of time that a person is required to keep books and records under
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Section 59-1-1406.
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(c) The Department of Environmental Quality shall submit to the commission an
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electronic list that includes:
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(i) the name and identifying information of each claimant, estate, or trust to which the
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Department of Environmental Quality issues a written certification; and
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(ii) for each claimant, estate, or trust, the amount of each tax credit listed on the
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written certification.
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(3) A claimant, estate, or trust may not claim a tax credit under Subsection (1)(a),
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Subsection (1)(b), or both that exceeds 40% of the claimant's, estate's, or trust's state
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income tax liability as the tax liability is calculated:
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(a) for the taxable year in which the claimant, estate, or trust made the purchases or
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payments;
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(b) before any other tax credits the claimant, estate, or trust may claim for the taxable
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year; and
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(c) before the claimant, estate, or trust claims a tax credit authorized by this section.
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(4) The commission shall make rules governing what information a claimant, estate, or trust
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shall file with the commission to verify the entitlement to and amount of a tax credit.
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(5) Except as provided in Subsections (6) through (8), a claimant, estate, or trust may carry
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forward, to the next three taxable years, the amount of a tax credit described in
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Subsection (1)(a) that the claimant, estate, or trust does not use for the taxable year.
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(6) A claimant, estate, or trust may not claim or carry forward a tax credit described in
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Subsection (1)(a) in a taxable year during which the claimant, estate, or trust claims or
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carries forward a tax credit under Section 63N-2-213.
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(7) A claimant, estate, or trust may not claim a tax credit described in Subsection (1)(b) in a
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taxable year during which the claimant, estate, or trust claims or carries forward a tax
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credit under Section 63N-2-213.
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Section 13. Section 59-10-1017 is amended to read:
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59-10-1017 . Utah Educational Savings Plan tax credit.
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(1) As used in this section:
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(a) "Account owner" means the same as that term is defined in Section 53B-8a-102.
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(b) "Grantor trust" means the same as that term is defined in Section 53B-8a-102.5.
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(c) "Higher education costs" means the same as that term is defined in Section
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53B-8a-102.5.
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(d) "Maximum amount of a qualified investment for the taxable year" means, for a
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taxable year, the product of the [percentage listed in Subsection 59-10-104(2)] income
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tax rate and:
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(i) subject to Subsection (1)(d)(iii), for a claimant, estate, or trust that is an account
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owner, if that claimant, estate, or trust is other than husband and wife account
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owners who file a single return jointly, the maximum amount of a qualified
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investment:
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(A) listed in Subsection 53B-8a-106(1)(e)(ii); and
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(B) increased or kept for that taxable year in accordance with Subsections
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53B-8a-106(1)(f) and (g);
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(ii) subject to Subsection (1)(d)(iii), for claimants who are husband and wife account
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owners who file a single return jointly, the maximum amount of a qualified
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investment:
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(A) listed in Subsection 53B-8a-106(1)(e)(iii); and
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(B) increased or kept for that taxable year in accordance with Subsections
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53B-8a-106(1)(f) and (g); or
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(iii) for a grantor trust:
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(A) if the owner of the grantor trust has a single filing status or head of household
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filing status as defined in Section 59-10-1018, the amount described in
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Subsection (1)(d)(i); or
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(B) if the owner of the grantor trust has a joint filing status as defined in Section
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59-10-1018, the amount described in Subsection (1)(d)(ii).
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(e) "Owner of the grantor trust" means the same as that term is defined in Section
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53B-8a-102.5.
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(f) "Qualified investment" means the same as that term is defined in Section
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53B-8a-102.5.
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(2) Except as provided in Section 59-10-1002.2 and subject to the other provisions of this
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section, a claimant, estate, or trust that is an account owner may claim a nonrefundable
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tax credit equal to the product of:
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(a) the amount of a qualified investment made:
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(i) during the taxable year; and
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(ii) into an account owned by the claimant, estate, or trust; and
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(b) the [percentage listed in Subsection 59-10-104(2)] income tax rate.
397
(3) A claimant, estate, or trust, or a person other than the claimant, estate, or trust, may
398
make a qualified investment described in Subsection (2).
399
(4) A claimant, estate, or trust that is an account owner may not claim a tax credit under this
400
section with respect to any portion of a qualified investment described in Subsection (2)
401
that a claimant, estate, trust, or person described in Subsection (3) deducts on a federal
402
income tax return.
403
(5) A tax credit under this section may not exceed the maximum amount of a qualified
404
investment for the taxable year.
- 12 - 01-23 17:11 1st Sub. (Green) S.B. 85
405
(6) A claimant, estate, or trust that is an account owner may not carry forward or carry back
406
the tax credit under this section.
407
Section 14. Section 59-10-1022 is amended to read:
408
59-10-1022 . Nonrefundable tax credit for capital gain transactions.
409
(1) As used in this section:
410
(a)[(i)] "Capital gain transaction" means a transaction that results in a:
411
[(A)] (i) short-term capital gain; or
412
[(B)] (ii) long-term capital gain.
413
[(ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
414
the commission may by rule define the term "transaction."]
415
(b) "Commercial domicile" means the principal place from which the trade or business
416
of a Utah small business corporation is directed or managed.
417
(c) "Long-term capital gain" [is as] means the same as that term is defined in Section
418
1222, Internal Revenue Code.
419
(d) "Qualifying stock" means stock that is:
420
(i)(A) common; or
421
(B) preferred;
422
(ii) as defined by the commission by rule made in accordance with Title 63G,
423
Chapter 3, Utah Administrative Rulemaking Act, originally issued to:
424
(A) a claimant, estate, or trust; or
425
(B) a partnership if the claimant, estate, or trust that claims a tax credit under this
426
section:
427
(I) was a partner on the day on which the stock was issued; and
428
(II) remains a partner until the last day of the taxable year for which the
429
claimant, estate, or trust claims a tax credit under this section; and
430
(iii) issued:
431
(A) by a Utah small business corporation;
432
(B) on or after January 1, 2008; and
433
(C) for:
434
(I) money; or
435
(II) other property, except for stock or securities.
436
(e) "Short-term capital gain" [is as] means the same as that term is defined in Section
437
1222, Internal Revenue Code.
438
(f) "Transaction" means the definition the commission makes by rule made in
- 13 - 1st Sub. (Green) S.B. 85 01-23 17:11
439
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
440
[(f)] (g)(i) "Utah small business corporation" means a corporation that:
441
(A) except as provided in Subsection [(1)(f)(ii)] (1)(g)(ii), is a small business
442
corporation as defined in Section 1244(c)(3), Internal Revenue Code;
443
(B) except as provided in Subsection [(1)(f)(iii)] (1)(g)(iii), meets the requirements
444
of Section 1244(c)(1)(C), Internal Revenue Code; and
445
(C) has [its] the corporation's commercial domicile in this state.
446
(ii) The dollar amount listed in Section 1244(c)(3)(A) is considered to be $2,500,000.
447
(iii) The phrase "the date the loss on such stock was sustained" in Sections
448
1244(c)(1)(C) and 1244(c)(2), Internal Revenue Code, is considered to be "the last
449
day of the taxable year for which the claimant, estate, or trust claims a tax credit
450
under this section."
451
(2) [For taxable years beginning on or after January 1, 2008, a] A claimant, estate, or trust
452
that meets the requirements of Subsection (3) may claim a nonrefundable tax credit
453
equal to the product of:
454
(a) the total amount of the claimant's, estate's, or trust's short-term capital gain or
455
long-term capital gain on a capital gain transaction that occurs on or after January 1,
456
2008; and
457
(b) the [percentage listed in Subsection 59-10-104(2)] income tax rate.
458
(3) For purposes of Subsection (2), a claimant, estate, or trust may claim the nonrefundable
459
tax credit allowed by Subsection (2) if:
460
(a) 70% or more of the gross proceeds of the capital gain transaction are expended:
461
(i) to purchase qualifying stock in a Utah small business corporation; and
462
(ii) within a 12-month period after the day on which the capital gain transaction
463
occurs; and
464
(b) [prior to] before the purchase of the qualifying stock described in Subsection (3)(a)(i),
465
the claimant, estate, or trust did not have an ownership interest in the Utah small
466
business corporation that issued the qualifying stock.
467
(4) A claimant, estate, or trust may not carry forward or carry back a tax credit under this
468
section.
469
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
470
commission may make rules:
471
(a) defining the term "gross proceeds"; and
472
(b) [prescribing] providing the circumstances under which a claimant, estate, or trust has
- 14 - 01-23 17:11 1st Sub. (Green) S.B. 85
473
an ownership interest in a Utah small business corporation.
474
Section 15. Section 59-10-1023 is amended to read:
475
59-10-1023 . Nonrefundable tax credit for amounts paid under a health benefit
476
plan.
477
(1) As used in this section:
478
(a) "Claimant with dependents" means a claimant:
479
(i) regardless of the claimant's filing status for purposes of filing a federal individual
480
income tax return for the taxable year; and
481
(ii) who claims one or more dependents under Section 151, Internal Revenue Code,
482
as allowed on the claimant's federal individual income tax return for the taxable
483
year.
484
(b) "Eligible insured individual" means:
485
(i) the claimant who is insured under a health benefit plan;
486
(ii) the spouse of the claimant described in Subsection (1)(b)(i) if:
487
(A) the claimant files a single return jointly under this chapter with the claimant's
488
spouse for the taxable year; and
489
(B) the spouse is insured under the health benefit plan described in Subsection
490
(1)(b)(i); or
491
(iii) a dependent of the claimant described in Subsection (1)(b)(i) if:
492
(A) the claimant claims the dependent under Section 151, Internal Revenue Code,
493
as allowed on the claimant's federal individual income tax return for the
494
taxable year; and
495
(B) the dependent is insured under the health benefit plan described in Subsection
496
(1)(b)(i).
497
(c) "Excluded expenses" means an amount a claimant pays for insurance offered under a
498
health benefit plan for a taxable year if:
499
(i) the claimant claims a tax credit for that amount under Section 35, Internal
500
Revenue Code:
501
(A) on the claimant's federal individual income tax return for the taxable year; and
502
(B) with respect to an eligible insured individual;
503
(ii) the claimant deducts that amount under Section 162 or 213, Internal Revenue
504
Code:
505
(A) on the claimant's federal individual income tax return for the taxable year; and
506
(B) with respect to an eligible insured individual; or
- 15 - 1st Sub. (Green) S.B. 85 01-23 17:11
507
(iii) the claimant excludes that amount from gross income under Section 106 or 125,
508
Internal Revenue Code, with respect to an eligible insured individual.
509
(d)(i) "Health benefit plan" [is as] means the same as that term is defined in Section
510
31A-1-301.
511
(ii) "Health benefit plan" does not include equivalent self-insurance as defined by the
512
Insurance Department by rule made in accordance with Title 63G, Chapter 3, Utah
513
Administrative Rulemaking Act.
514
(e) "Joint claimant with no dependents" means [a husband and wife] spouses who:
515
(i) file a single return jointly under this chapter for the taxable year; and
516
(ii) do not claim a dependent under Section 151, Internal Revenue Code, on the [
517
husband's and wife's] spouses' federal individual income tax return for the taxable
518
year.
519
(f) "Single claimant with no dependents" means:
520
(i) a single individual who:
521
(A) files a single federal individual income tax return for the taxable year; and
522
(B) does not claim a dependent under Section 151, Internal Revenue Code, on the
523
single individual's federal individual income tax return for the taxable year;
524
(ii) a head of household:
525
(A) as defined in Section 2(b), Internal Revenue Code, who files a single federal
526
individual income tax return for the taxable year; and
527
(B) who does not claim a dependent under Section 151, Internal Revenue Code,
528
on the head of household's federal individual income tax return for the taxable
529
year; or
530
(iii) a married individual who:
531
(A) does not file a single federal individual income tax return jointly with that
532
married individual's spouse for the taxable year; and
533
(B) does not claim a dependent under Section 151, Internal Revenue Code, on that
534
married individual's federal individual income tax return for the taxable year.
535
(2) Subject to Subsection (3), and except as provided in Subsection (4), [for taxable years
536
beginning on or after January 1, 2009, ]a claimant may claim a nonrefundable tax credit
537
equal to the product of:
538
(a) the difference between:
539
(i) the total amount the claimant pays during the taxable year for:
540
(A) insurance offered under a health benefit plan; and
- 16 - 01-23 17:11 1st Sub. (Green) S.B. 85
541
(B) an eligible insured individual; and
542
(ii) excluded expenses; and
543
(b) the [percentage listed in Subsection 59-10-104(2)] income tax rate.
544
(3) The maximum amount of a tax credit described in Subsection (2) a claimant may claim
545
on a return for a taxable year is:
546
(a) for a single claimant with no dependents, $300;
547
(b) for a joint claimant with no dependents, $600; or
548
(c) for a claimant with dependents, $900.
549
(4) A claimant may not claim a tax credit under this section if the claimant is eligible to
550
participate in insurance offered under a health benefit plan maintained and funded in
551
whole or in part by:
552
(a) the claimant's employer; or
553
(b) another person's employer.
554
(5) A claimant may not carry forward or carry back a tax credit under this section.
555
Section 16. Section 59-10-1028 is amended to read:
556
59-10-1028 . Nonrefundable tax credit for capital gain transactions on the
557
exchange of one form of legal tender for another form of legal tender.
558
(1) As used in this section:
559
(a) "Capital gain transaction" means a transaction that results in a:
560
(i) short-term capital gain; or
561
(ii) long-term capital gain.
562
(b) "Long-term capital gain" [is as] means the same as that term is defined in Section
563
1222, Internal Revenue Code.
564
(c) "Long-term capital loss" [is as] means the same as that term is defined in Section
565
1222, Internal Revenue Code.
566
(d) "Net capital gain" means the amount by which the sum of long-term capital gains
567
and short-term capital gains on a claimant's, estate's, or trust's transactions from
568
exchanges made for a taxable year of one form of legal tender for another form of
569
legal tender exceeds the sum of long-term capital losses and short-term capital losses
570
on those transactions for that taxable year.
571
(e) "Short-term capital loss" [is as] means the same as that term is defined in Section
572
1222, Internal Revenue Code.
573
(f) "Short-term capital gain" [is as] means the same as that term is defined in Section
574
1222, Internal Revenue Code.
- 17 - 1st Sub. (Green) S.B. 85 01-23 17:11
575
(2) Except as provided in Section 59-10-1002.2, [for taxable years beginning on or after
576
January 1, 2012, ]a claimant, estate, or trust may claim a nonrefundable tax credit equal
577
to the product of:
578
(a) to the extent a net capital gain is included in taxable income, the amount of the
579
claimant's, estate's, or trust's net capital gain on capital gain transactions from
580
exchanges made on or after January 1, 2012, for a taxable year, of one form of legal
581
tender for another form of legal tender; and
582
(b) the [percentage listed in Subsection 59-10-104(2)] income tax rate.
583
(3) A claimant, estate, or trust may not carry forward or carry back a tax credit under this
584
section.
585
(4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
586
commission may make rules to implement this section.
587
Section 17. Section 59-10-1035 is amended to read:
588
59-10-1035 . Nonrefundable tax credit for contribution to state Achieving a
589
Better Life Experience Program account.
590
(1) As used in this section:
591
(a) "Account" means an account in a qualified ABLE program where the designated
592
beneficiary of the account is a resident of this state.
593
(b) "Contributor" means a claimant, estate, or trust that:
594
(i) makes a contribution to an account; and
595
(ii) receives a statement from the qualified ABLE program itemizing the contribution.
596
(c) "Designated beneficiary" means the same as that term is defined in 26 U.S.C. Sec.
597
529A.
598
(d) "Qualified ABLE program" means the same as that term is defined in Section
599
35A-12-102.
600
(2) A contributor to an account may claim a nonrefundable tax credit as provided in this
601
section.
602
(3) Subject to the other provisions of this section, the tax credit is equal to the product of:
603
(a) the [percentage listed in Subsection 59-10-104(2)] income tax rate; and
604
(b) the total amount of contributions:
605
(i) the contributor makes for the taxable year; and
606
(ii) for which the contributor receives a statement from the qualified ABLE program
607
itemizing the contributions.
608
(4) A contributor may not claim a tax credit under this section:
- 18 - 01-23 17:11 1st Sub. (Green) S.B. 85
609
(a) for an amount of excess contribution to an account that is returned to the contributor;
610
or
611
(b) with respect to an amount the contributor deducts on a federal income tax return.
612
(5) A contributor may not carry forward or carry back a tax credit under this section[ may
613
not be carried forward or carried back].
614
Section 18. Section 59-10-1036 is amended to read:
615
59-10-1036 . Nonrefundable tax credit for military survivor benefits.
616
(1) As used in this section:
617
(a) "Dependent child" means the same as that term is defined in 10 U.S.C. Sec. 1447.
618
(b) "Reserve components" means the same as that term is described in 10 U.S.C. Sec.
619
10101.
620
(c) "Surviving spouse" means the same as that term is defined in 10 U.S.C. Sec. 1447.
621
(d) "Survivor benefits" means the amount paid by the federal government in accordance
622
with 10 U.S.C. Secs. 1447 through 1455.
623
(2) A surviving spouse or dependent child may claim a nonrefundable tax credit for
624
survivor benefits if the benefits are paid due to:
625
(a) the death of a member of the armed forces or reserve components while on active
626
duty; or
627
(b) the death of a member of the reserve components that results from a
628
service-connected cause while performing inactive duty training.
629
(3) The tax credit described in Subsection (2) is equal to the product of:
630
(a) the amount of survivor benefits that the surviving spouse or dependent child received
631
during the taxable year; and
632
(b) the [percentage listed in Subsection 59-10-104(2)] income tax rate.
633
(4) [The tax credit described in Subsection (2):] A surviving spouse or a dependent child
634
may not carry forward or carry back a tax credit under this section.
635
[(a) may not be carried forward or carried back; and]
636
[(b) applies to a taxable year beginning on or after January 1, 2017.]
637
Section 19. Section 59-10-1042 is amended to read:
638
59-10-1042 . Nonrefundable tax credit for social security benefits.
639
(1) As used in this section:
640
(a) "Head of household filing status" means the same as that term is defined in Section
641
59-10-1018.
642
(b) "Joint filing status" means the same as that term is defined in Section 59-10-1018.
- 19 - 1st Sub. (Green) S.B. 85 01-23 17:11
643
(c) "Married filing separately status" means a married individual who:
644
(i) does not file a single federal individual income tax return jointly with that married
645
individual's spouse for the taxable year; and
646
(ii) files a single federal individual income tax return for the taxable year.
647
(d) "Modified adjusted gross income" means the sum of the following for a claimant or,
648
if the claimant's return under this chapter is allowed a joint filing status, the claimant
649
and the claimant's spouse:
650
(i) adjusted gross income for the taxable year for which a tax credit is claimed under
651
this section;
652
(ii) any interest income that is not included in adjusted gross income for the taxable
653
year described in Subsection (1)(d)(i); and
654
(iii) any addition to adjusted gross income required by Section 59-10-114 for the
655
taxable year described in Subsection (1)(d)(i).
656
(e) "Single filing status" means a single individual who files a single federal individual
657
income tax return for the taxable year.
658
(f) "Social security benefit" means an amount received by a claimant as a monthly
659
benefit in accordance with the Social Security Act, 42 U.S.C. Sec. 401 et seq.
660
(2) Except as provided in Section 59-10-1002.2 and Subsections (3) and (4), each claimant
661
on a return that receives a social security benefit may claim a nonrefundable tax credit
662
against taxes otherwise due under this part equal to the product of:
663
(a) the [percentage listed in Subsection 59-10-104(2)] income tax rate; and
664
(b) the claimant's social security benefit that is included in adjusted gross income on the
665
claimant's federal income tax return for the taxable year.
666
(3) A claimant may not:
667
(a) carry forward or carry back the amount of a tax credit under this section that exceeds
668
the claimant's tax liability for the taxable year; or
669
(b) claim a tax credit under this section for a taxable year if a tax credit under Section
670
59-10-1019 is claimed on the claimant's return for the same taxable year.
671
(4) The tax credit allowed by Subsection (2) claimed on a return filed under this part shall
672
be reduced by $.025 for each dollar by which modified adjusted gross income for
673
purposes of the return exceeds:
674
(a) for a federal individual income tax return that is allowed a married filing separately
675
status, $37,500;
676
(b) for a federal individual income tax return that is allowed a single filing status,
- 20 - 01-23 17:11 1st Sub. (Green) S.B. 85
677
$45,000;
678
(c) for a federal individual income tax return that is allowed a head of household filing
679
status, $75,000; or
680
(d) for a federal individual income tax return [under this chapter ]that is allowed a joint
681
filing status, $75,000.
682
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
683
commission may make rules governing the calculation and method for claiming the tax
684
credit described in this section.
685
Section 20. Section 59-10-1043 is amended to read:
686
59-10-1043 . Nonrefundable tax credit for military retirement.
687
(1) As used in this section:
688
(a)(i) "Military retirement pay" means retirement pay, including survivor benefits,
689
that relates to service in the armed forces or the reserve components, as described
690
in 10 U.S.C. Sec. 10101.
691
(ii) "Military retirement pay" does not include:
692
(A) Social Security income;
693
(B) 401(k) or IRA distributions; or
694
(C) income from other sources.
695
(b) "Survivor benefits" means the retired pay portion of the benefits described in 10
696
U.S.C. Secs. 1447 through 1455.
697
(2) Except as provided in Section 59-10-1002.2, a claimant who receives military
698
retirement pay may claim a nonrefundable tax credit against taxes equal to the product
699
of:
700
(a) the [percentage listed in Subsection 59-10-104(2)] income tax rate; and
701
(b) the amount of military retirement pay that is included in adjusted gross income on
702
the claimant's federal income tax return for the taxable year.
703
(3) A claimant may not:
704
(a) carry forward or carry back the amount of a tax credit that exceeds the claimant's tax
705
liability for the taxable year; or
706
(b) claim a tax credit under this section for a taxable year if a tax credit under Section
707
59-10-1019 is claimed on the claimant's return for the same taxable year.
708
Section 21. Section 59-10-1403.2 is amended to read:
709
59-10-1403.2 . Pass-through entity payment or withholding of tax on behalf of a
710
pass-through entity taxpayer -- Exceptions to payment or withholding requirement --
- 21 - 1st Sub. (Green) S.B. 85 01-23 17:11
711
Procedures and requirements -- Failure to pay or withhold a tax on behalf of a
712
pass-through entity taxpayer.
713
(1)(a) Except as provided in Subsections (1)(b) and (2), for a taxable year, a
714
pass-through entity shall pay or withhold a tax:
715
(i) on:
716
(A) the business income of the pass-through entity; and
717
(B) the nonbusiness income of the pass-through entity derived from or connected
718
with Utah sources; and
719
(ii) on behalf of a pass-through entity taxpayer.
720
(b) A pass-through entity is not required to pay or withhold a tax under Subsection (1)(a):
721
(i) on behalf of a final pass-through entity taxpayer who is a resident individual;
722
(ii) if the pass-through entity is an organization exempt from taxation under
723
Subsection 59-7-102(1)(a);
724
(iii) if the pass-through entity:
725
(A) is a plan under Section 401, 408, or 457, Internal Revenue Code; and
726
(B) is not required to file a return under Chapter 7, Corporate Franchise and
727
Income Taxes, or this chapter;
728
(iv) if the pass-through entity is a publicly traded partnership:
729
(A) as defined in Section 7704(b), Internal Revenue Code;
730
(B) that is classified as a partnership for federal income tax purposes; and
731
(C) that files an annual information return reporting the following with respect to
732
each partner of the publicly traded partnership with income derived from or
733
connected with Utah sources that exceeds $500 in a taxable year:
734
(I) the partner's name;
735
(II) the partner's address;
736
(III) the partner's taxpayer identification number; and
737
(IV) other information required by the commission; or
738
(v) on behalf of a final pass-through entity taxpayer that is a nonresident individual if
739
the pass-through entity pays the tax described in Subsection (2).
740
(2)(a) For each taxable year that begins on or after January 1, 2022, but begins on or
741
before December 31, 2025, a pass-through entity that is not a disregarded
742
pass-through entity may elect to pay a tax in an amount equal to the product of:
743
(i) the [percentage listed in Subsection 59-10-104(2)] income tax rate; and
744
(ii) voluntary taxable income.
- 22 - 01-23 17:11 1st Sub. (Green) S.B. 85
745
(b) A pass-through entity that elects to pay the tax in accordance with Subsection (2)(a)
746
shall notify any final pass-through entity taxpayer of that election.
747
(c) A pass-through entity that pays a tax described in Subsection (2)(a) shall provide to
748
each final pass-through entity taxpayer a statement that states:
749
(i) the amount of tax paid under Subsection (2)(a) on the income attributed to the
750
final pass-through entity taxpayer; and
751
(ii) the amount of tax paid to another state by the pass-through entity on income:
752
(A) attributed to the final pass-through entity taxpayer; and
753
(B) that the commission determines is substantially similar to the tax under
754
Subsection (2)(a).
755
(d) A payment of the tax described in Subsection (2)(a) on or before the last day of the
756
taxable year:
757
(i) is an irrevocable election to be subject to the tax for the taxable year; and
758
(ii) may not be refunded.
759
(3)(a) Subject to Subsection (3)(b), the tax a pass-through entity shall pay or withhold on
760
behalf of a pass-through entity taxpayer for a taxable year is an amount:
761
(i) determined by the commission by rule made in accordance with Title 63G,
762
Chapter 3, Utah Administrative Rulemaking Act; and
763
(ii) that the commission estimates will be sufficient to pay the tax liability of the
764
pass-through entity taxpayer under this chapter with respect to the income
765
described in Subsection (1)(a)(i) or (2)(a)(ii) of that pass-through entity for the
766
taxable year.
767
(b) The rules the commission makes in accordance with Subsection (3)(a):
768
(i) except as provided in Subsection (3)(c):
769
(A) shall:
770
(I) for a pass-through entity except for a pass-through entity that is an S
771
corporation, take into account items of income, gain, loss, deduction, and
772
credit as analyzed on the schedule for reporting partners' distributive share
773
items as part of the federal income tax return for the pass-through entity; or
774
(II) for a pass-through entity that is an S corporation, take into account items of
775
income, gain, loss, deduction, and credit as reconciled on the schedule for
776
reporting shareholders' pro rata share items as part of the federal income tax
777
return for the pass-through entity; and
778
(B) notwithstanding Subsection (3)(b)(ii)(D), take into account the refundable tax
- 23 - 1st Sub. (Green) S.B. 85 01-23 17:11
779
credit provided in Section 59-6-102; and
780
(ii) may not take into account the following items if taking those items into account
781
does not result in an accurate estimate of a pass-through entity taxpayer's tax
782
liability under this chapter for the taxable year:
783
(A) a capital loss;
784
(B) a passive loss;
785
(C) another item of deduction or loss if that item of deduction or loss is generally
786
subject to significant reduction or limitation in calculating:
787
(I) for a pass-through entity taxpayer that is classified as a C corporation for
788
federal income tax purposes, unadjusted income as defined in Section
789
59-7-101;
790
(II) for a pass-through entity that is classified as an individual, partnership, or S
791
corporation for federal income tax purposes, adjusted gross income; or
792
(III) for a pass-through entity that is classified as an estate or a trust for federal
793
income tax purposes, unadjusted income as defined in Section 59-10-103; or
794
(D) a tax credit allowed against a tax imposed under:
795
(I) Chapter 7, Corporate Franchise and Income Taxes; or
796
(II) this chapter.
797
(c) The rules the commission makes in accordance with Subsection (3)(a) may establish
798
a method for taking into account items of income, gain, loss, deduction, or credit of a
799
pass-through entity if:
800
(i) for a pass-through entity except for a pass-through entity that is an S corporation,
801
the pass-through entity does not analyze the items of income, gain, loss,
802
deduction, or credit on the schedule for reporting partners' distributive share items
803
as part of the federal income tax return for the pass-through entity; or
804
(ii) for a pass-through entity that is an S corporation, the pass-through entity does not
805
reconcile the items of income, gain, loss, deduction, or credit on the schedule for
806
reporting shareholders' pro rata share items as part of the federal income tax return
807
for the pass-through entity.
808
(4)(a) Except as provided in Subsection (4)(b), a pass-through entity shall remit to the
809
commission the tax the pass-through entity pays or withholds on behalf of a
810
pass-through entity taxpayer under this section:
811
(i) on or before the due date of the pass-through entity's return, not including
812
extensions; and
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813
(ii) on a form provided by the commission.
814
(b) A pass-through entity shall remit the tax described in Subsection (2) on or before the
815
last day of the pass-through entity's taxable year.
816
(c) The commission shall consider only the amount of tax remitted as provided in
817
Subsection (4)(b), on or before the last day of the pass-through entity's taxable year
818
as a payment described in Subsection (2).
819
(d) Except as provided in Subsection (1)(b), a pass-through entity that files an amended
820
return under this part shall pay or withhold tax on any increase in the income
821
described in Subsection (1)(a)(i) on behalf of the pass-through entity taxpayer and
822
remit that tax to the commission.
823
(5) A pass-through entity shall provide a statement to a pass-through entity taxpayer on
824
behalf of whom the pass-through entity pays or withholds a tax under this section
825
showing the amount of tax the pass-through entity pays or withholds under this section
826
for the taxable year on behalf of the pass-through entity taxpayer.
827
(6) Notwithstanding Section 59-1-401 or 59-1-402, the commission may not collect an
828
amount under this section for a taxable year from a pass-through entity and shall waive
829
any penalty and interest on that amount if:
830
(a) the pass-through entity fails to pay or withhold the tax on the amount as required by
831
this section on behalf of the pass-through entity taxpayer;
832
(b) the pass-through entity taxpayer:
833
(i) files a return on or before the due date for filing the pass-through entity's return,
834
including extensions; and
835
(ii) on or before the due date including extensions described in Subsection (6)(b)(i),
836
pays the tax on the amount for the taxable year:
837
(A) if the pass-through entity taxpayer is classified as a C corporation for federal
838
income tax purposes, under Chapter 7, Corporate Franchise and Income Taxes;
839
or
840
(B) if the pass-through entity taxpayer is classified as an estate, individual,
841
partnership, S corporation, or a trust for federal income tax purposes, under this
842
chapter; and
843
(c) the pass-through entity applies to the commission.
844
(7) Notwithstanding Section 59-1-401 or 59-1-402, the commission may not collect an
845
amount under this section for a taxable year from a pass-through entity that is a trust and
846
shall waive any penalty and interest on that amount if:
- 25 - 1st Sub. (Green) S.B. 85 01-23 17:11
847
(a) the pass-through entity fails to pay or withhold the tax on the amount as required by
848
this section on behalf of a dependent beneficiary;
849
(b) the pass-through entity applies to the commission; and
850
(c)(i) the dependent beneficiary complies with the requirements of Subsection (6)(b);
851
or
852
(ii)(A) the dependent beneficiary's adjusted gross income for the taxable year does
853
not exceed the basic standard deduction for the dependent beneficiary, as
854
calculated under Section 63, Internal Revenue Code, for that taxable year; and
855
(B) the trustee of the trust retains a statement of dependent beneficiary income on
856
behalf of the dependent beneficiary.
857
(8) If a pass-through entity would have otherwise qualified for a waiver of a penalty and
858
interest under Subsection (7), except that the trustee of a trust has not applied to the
859
commission as required by Subsection (7)(b) or retained the statement of dependent
860
beneficiary income required by Subsection (7)(c)(ii)(B), it is a rebuttable presumption in
861
an audit that the pass-through entity would have otherwise qualified for the waiver of the
862
penalty and interest under Subsection (7).
863
Section 22. Section 59-10-1403.3 is amended to read:
864
59-10-1403.3 . Refund of amounts paid or withheld for a pass-through entity.
865
(1) As used in this section:
866
(a) "Committee" means the Revenue and Taxation Interim Committee.
867
(b) "Qualifying excess withholding" means an amount that:
868
(i) is paid or withheld:
869
(A) by a pass-through entity that has a different taxable year than the pass-through
870
entity that requests a refund under this section; and
871
(B) on behalf of the pass-through entity that requests the refund, if the
872
pass-through entity that requests the refund also is a pass-through entity
873
taxpayer; and
874
(ii) is equal to the difference between:
875
(A) the amount paid or withheld for the taxable year on behalf of the pass-through
876
entity that requests the refund; and
877
(B) the product of the [percentage listed in Subsection 59-10-104(2)] income tax
878
rate and the income, described in Subsection 59-10-1403.2(1)(a)(i), of the
879
pass-through entity that requests the refund.
880
(2) [For a taxable year ending on or after July 1, 2017, a] A pass-through entity may claim a
- 26 - 01-23 17:11 1st Sub. (Green) S.B. 85
881
refund of qualifying excess withholding, if the amount of the qualifying excess
882
withholding is equal to or greater than $250,000.
883
(3) A pass-through entity that requests a refund of qualifying excess withholding under this
884
section shall:
885
(a) apply to the commission for a refund on or, subject to Subsection (4), after the day
886
on which the pass-through entity files the pass-through entity's income tax return; and
887
(b) provide any information that the commission may require to determine that the
888
pass-through entity is eligible to receive the refund.
889
(4) A pass-through entity shall claim a refund of qualifying excess withholding under this
890
section within 30 days after the earlier of the day on which:
891
(a) the pass-through entity files an income tax return; or
892
(b) the pass-through entity's income tax return is due, including any extension of due
893
date authorized in statute.
894
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
895
commission may make rules establishing the information that a pass-through entity shall
896
provide to the commission to obtain a refund of qualifying excess withholding under this
897
section.
898
[(6)(a) On or before November 30, 2018, the committee shall review the $250,000
899
threshold described in Subsection (2) for the purpose of assessing whether the
900
threshold amount should be maintained, increased, or decreased.]
901
[(b) To assist the committee in conducting the review described in Subsection (6)(a), the
902
commission shall provide the committee with:]
903
[(i) the total number of refund requests made under this section;]
904
[(ii) the total costs of any refunds issued under this section;]
905
[(iii) the costs of any audits conducted on refund requests made under this section;
906
and]
907
[(iv) an estimation of:]
908
[(A) the number of refund requests the commission expects to receive if the
909
Legislature increases the threshold;]
910
[(B) the number of refund requests the commission expects to receive if the
911
Legislature decreases the threshold; and]
912
[(C) the costs of any audits the commission would conduct if the Legislature
913
increases or decreases the threshold.]
914
Section 23. Section 63I-1-259 is amended to read:
- 27 - 1st Sub. (Green) S.B. 85 01-23 17:11
915
63I-1-259 . Repeal dates: Title 59.
916
(1) Subsection 59-1-403(4)(aa), regarding a requirement for the State Tax Commission to
917
inform the Department of Workforce Services whether an individual claimed a federal
918
earned income tax credit, is repealed July 1, 2029.
919
(2) Title 59, Chapter 1, Part 18, Income Tax Rate, is repealed July 1, 2036.
920
[(2)] (3) Section 59-7-618.1, Tax credit related to alternative fuel heavy duty vehicles, is
921
repealed July 1, 2029.
922
[(3)] (4) Section 59-9-102.5, Offset for occupational health and safety related donations, is
923
repealed December 31, 2030.
924
[(4)] (5) Section 59-10-1033.1, Tax credit related to alternative fuel heavy duty vehicles, is
925
repealed July 1, 2029.
926
Section 24. Effective Date.
927
(1) Except as provided in Subsection (2), this bill takes effect for a taxable year beginning
928
on or after January 1, 2026.
929
(2) The actions affecting the following sections take effect on January 1, 2026:
930
(a) Section 59-1-101;
931
(b) Section 59-1-1801;
932
(c) Section 59-1-1802; and
933
(d) Section 63I-1-259.
- 28 -