Income Tax Rate Modifications

57
59-1-101
59-1-1901
59-1-1902
59-6-102
59-7-104
59-7-201
59-7-610
59-7-701
59-7-802
59-10-104
59-10-116
59-10-201
59-10-205
59-10-1007
59-10-1017
59-10-1022
59-10-1023
59-10-1028
59-10-1035
59-10-1036
59-10-1042
59-10-1043
59-10-1403.2
59-10-1403.3
63I-1-259
0
Income Tax Rate Modifications
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Lincoln Fillmore
House Sponsor:
LONG TITLE
General Description:
This bill modifies the income tax rates.
Highlighted Provisions:
This bill:
defines terms;
provides for a reduction of the income tax rate when the actual state revenue exceeds the
forecast revenue;
provides a formula and process for calculating a reduction of the income tax rate;
requires the State Tax Commission to publish the income tax rate annually;
changes the mineral production tax withholding rate; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
59-1-101
, as last amended by Laws of Utah 2009, Chapter 212
59-6-102
, as last amended by Laws of Utah 2008, Chapter 255
59-7-104
, as last amended by Laws of Utah 2025, Chapter 407
59-7-201
, as last amended by Laws of Utah 2025, Chapter 407
59-7-610
, as last amended by Laws of Utah 2021, Chapter 367
59-7-701
, as last amended by Laws of Utah 2016, Chapters 87, 135 and 222
59-7-802
, as last amended by Laws of Utah 1995, Chapter 311
59-10-104
, as last amended by Laws of Utah 2025, Chapter 407
59-10-116
, as last amended by Laws of Utah 2022, Chapter 252
59-10-201
, as last amended by Laws of Utah 2025, First Special Session, Chapter 9
59-10-205
, as last amended by Laws of Utah 2008, Chapter 389
59-10-1007
, as last amended by Laws of Utah 2021, Chapter 367
59-10-1017
, as last amended by Laws of Utah 2025, First Special Session, Chapter 9
59-10-1022
, as last amended by Laws of Utah 2021, Chapter 367
59-10-1023
, as last amended by Laws of Utah 2021, Chapter 367
59-10-1028
, as last amended by Laws of Utah 2021, Chapter 367
59-10-1035
, as last amended by Laws of Utah 2021, Chapter 367
59-10-1036
, as last amended by Laws of Utah 2021, Chapter 367
59-10-1042
, as last amended by Laws of Utah 2025, Chapter 182
59-10-1043
, as last amended by Laws of Utah 2022, Chapter 258
59-10-1403.2
, as last amended by Laws of Utah 2023, Chapter 470
59-10-1403.3
, as last amended by Laws of Utah 2021, Chapter 367
63I-1-259
, as last amended by Laws of Utah 2025, Chapter 270
ENACTS:
59-1-1901
, Utah Code Annotated 1953
59-1-1902
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
59-1-101
is amended to read:
59-1-101
. Definitions.
As used in this title:
(1)
"Commission" and "tax commission" mean the State Tax Commission.
(2)
"Deficiency"
is as
means the same as that term is
defined in Section
59-1-1402
.
(3)
"Income tax rate" means:
(a)
for a taxable year beginning on or after January 1, 2027, and beginning before
January 1, 2028, 4.5%;
(b)
for a taxable year beginning on or after January 1, 2028, and beginning before
January 1, 2038, the rate calculated and published in accordance with Section
59-1-1902
; and
(c)
for a taxable year beginning on or after January 1, 2038, the rate that is in effect for
the immediately preceding taxable year.
Section 2. Section
59-1-1901
is enacted to read:
19. Income Tax Rate
59-1-1901
. Definitions.
(1)
"Consensus entities" means:
(a)
the Office of the Legislative Fiscal Analyst;
(b)
the commission; and
(c)
the Governor's Office of Planning and Budget.
(2)
"Cost per .01 percentage points" means:
(a)
for the period between July 1, 2027, and October 1, 2027, $22,202,000;
(b)
for the period between July 1, 2028, and October 1, 2028, $23,272,000:
(c)
for the period between July 1, 2029, and October 1, 2029, $24,381,000;
(d)
for the period between July 1, 2030, and October 1, 2030, $25,532,000;
(e)
for the period between July 1, 2031, and October 1, 2031, $26,730,000;
(f)
for the period between July 1, 2032, and October 1, 2032, $27,978,000;
(g)
for the period between July 1, 2033, and October 1, 2033, $29,276,000;
(h)
for the period between July 1, 2034, and October 1, 2034, $30,627,000;
(i)
for the period between July 1, 2035, and October 1, 2035, $32,034,000; and
(j)
for the period between July 1, 2036, and October 1, 2036, $33,504,000.
(3)
"Forecast revenue" means state revenue of:
(a)
for the fiscal year ending June 30, 2027, $13,052,369,000;
(b)
for the fiscal year ending June 30, 2028, $13,681,320,000;
(c)
for the fiscal year ending June 30, 2029, $14,333,144,000;
(d)
for the fiscal year ending June 30, 2030, $15,009,527,000;
(e)
for the fiscal year ending June 30, 2031, $15,713,679,000;
(f)
for the fiscal year ending June 30, 2032, $16,447,226,000;
(g)
for the fiscal year ending June 30, 2033, $17,210,270,000;
(h)
for the fiscal year ending June 30, 2034, $18,004,432,000;
(i)
for the fiscal year ending June 30, 2035, $18,831,769,000; and
(j)
for the fiscal year ending June 30, 2036, $19,696,018,000.
(4)
"State revenue" means unrestricted revenue generated from:
(a)
liquor markups required by Section
32B-2-304
;
(b)
earnings on investment of state money deposited into the General Fund under
Section
51-7-4
;
(c)
severance tax imposed under Chapter 5, Severance Tax on Oil, Gas, and Mining;
(d)
mineral production tax withholding required by Chapter 6, Mineral Production Tax
Withholding;
(e)
income tax imposed under Chapter 7, Corporate Franchise and Income Taxes, and
Chapter 10, Individual Income Tax Act;
(f)
premiums tax imposed under Chapter 9, Taxation of Admitted Insurers;
(g)
state sales and use tax imposed under Chapter 12, Sales and Use Tax Act;
(h)
taxes imposed under Chapter 13, Motor and Special Fuel Tax Act;
(i)
taxes imposed on cigarettes and tobacco under Chapter 14, Cigarette and Tobacco
Tax and Licensing Act;
(j)
beer tax imposed under Chapter 15, Beer Tax;
(k)
mineral lease funds described in Chapter 21, Mineral Lease Funds;
(l)
multi-channel video or audio service tax imposed under Section
59-26-103
; and
(m)
other payments to the General Fund, Income Tax Fund, or Transportation Fund,
including fees, surcharges, penalties, interest, lapsing funds, rebates, and settlements.
(5)
"Unrestricted revenue" means revenue that is not statutorily dedicated or earmarked for
a particular use.
Section 3. Section
59-1-1902
is enacted to read:
59-1-1902
. Calculation of income tax rate.
(1)
cl
(a)
On or after July 1 and before October 1 of each year between 2027 and 2036, the
consensus entities shall determine whether the actual state revenue for the previous
fiscal year exceeds the forecast revenue for the previous fiscal year.
(b)
(i)
If the consensus entities determine that the actual state revenue for the previous
fiscal year exceeds the forecast revenue for the previous fiscal year, the consensus
entities shall calculate the amount that is equal to one-half of the difference
between actual state revenue for the previous fiscal year and forecast revenue for
the previous fiscal year.
(ii)
Subject to Subsection
(1)(b)(iii)
, the income tax rate decreases by .01 percentage
points for each cost per .01 percentage points in the amount calculated in
accordance with Subsection
(1)(b)(i)
.
(iii)
The income tax rate decreases only in intervals of .01 percentage points.
(c)
If the consensus entities determine that the actual state revenue for the previous fiscal
year does not exceed the forecast revenue for the previous fiscal year, the income tax
rate for the taxable year beginning on or after the next January 1 remains the same as
the income tax rate for the current taxable year.
(2)
On or before November 1, the commission shall publish the income tax rate for the
taxable year beginning on or after the next January 1.
Section 4. Section
59-6-102
is amended to read:
59-6-102
. Producer's obligation to deduct and withhold payments -- Amount --
Exempt payments -- Credit against tax.
(1)
Except as provided in Subsection
(2)
, each producer shall deduct and withhold from
each payment being made to any person in respect to production of minerals in this state,
but not including that to which the producer is entitled, an amount equal to 5% of the
amount which would have otherwise been payable to the person entitled to the payment.
(1)
Except as provided in Subsection
(2)
, each producer shall deduct and withhold from
each payment being made to any person in respect to production of minerals in this state,
but not including the payment to which the producer is entitled, an amount equal to the
income tax rate multiplied by the amount payable to the person entitled to the payment.
(2)
The obligation to deduct and withhold from payments as provided in Subsection
(1)

does not apply to those payments
which
that
are payable to:
(a)
the United States, this state, or an agency or political subdivision of the United States
or this state;
(b)
an organization that is exempt from the taxes imposed by
Chapter 7, Corporate
Franchise and Income Taxes
, in accordance with Subsection
59-7-102(1)(a)
;
(c)
an Indian or Indian tribe if the amounts accruing are subject to the supervision of the
United States or an agency of the United States; or
(d)
a business entity that files an exemption certificate in accordance with Section
59-6-102.1
.
(3)
A claimant, estate, or trust that files a tax return with the commission may claim a
refundable tax credit against the tax reflected on the tax return for the amount withheld
by the producer under Subsection
(1)
.
Section 5. Section
59-7-104
is amended to read:
59-7-104
. Tax -- Minimum tax.
(1)
Each domestic and foreign corporation, except a corporation that is exempt under
Section
59-7-102
, shall pay an annual tax to the state based on the corporation's Utah
taxable income for the taxable year for the privilege of exercising the corporation's
corporate franchise or for the privilege of doing business in the state.
(2)
The tax imposed by Subsection
(1)
is the amount equal to the income tax rate multiplied
by a corporation's Utah taxable income.
(2)
The tax shall be 4.5% of a corporation's Utah taxable income.
(3)
The minimum tax a corporation shall pay under this chapter is $100.
Section 6. Section
59-7-201
is amended to read:
59-7-201
. Tax -- Minimum tax.
(1)
There is imposed upon each corporation, except a corporation that is exempt under
Section
59-7-102
, a tax upon the corporation's Utah taxable income for the taxable year
that is derived from sources within this state other than income for any period that the
corporation is required to include in the corporation's tax base under Section
59-7-104
.
(2)
The tax imposed by Subsection (1) shall be 4.5% of a corporation's Utah taxable
income.
(2)
The tax imposed by Subsection
(1)
is the amount equal to the income tax rate multiplied
by a corporation's Utah taxable income.
(3)
In no case shall the tax be less than $100.
Section 7. Section
59-7-610
is amended to read:
59-7-610
. Recycling market development zones tax credits.
(1)
Subject to other provisions of this section, a taxpayer that is a business operating in a
recycling market development zone as defined in Section
19-13-102
may claim the
following nonrefundable tax credits:
(a)
a tax credit equal to the product of the
percentage listed in Subsection
59-7-104(2)
income tax rate
and the purchase price paid for machinery and equipment used
directly in:
(i)
commercial composting; or
(ii)
manufacturing facilities or plant units that:
(A)
manufacture, process, compound, or produce recycled items of tangible
personal property for sale; or
(B)
reduce or reuse postconsumer waste material; and
(b)
a tax credit equal to the lesser of:
(i)
20% of net expenditures to third parties for rent, wages, supplies, tools, test
inventory, and utilities made by the taxpayer for establishing and operating
recycling or composting technology in the state; and
(ii)
$2,000.
(2)
(a)
To claim a tax credit described in Subsection
(1)
, the taxpayer shall receive from
the Department of Environmental Quality a written certification, on a form
approved
by
the commission
approves
, that includes:
(i)
a statement that the taxpayer is operating a business within the boundaries of a
recycling market development zone;
(ii)
for a claim of the tax credit described in Subsection
(1)(a)
:
(A)
the type of the machinery and equipment that the taxpayer purchased;
(B)
the date that the taxpayer purchased the machinery and equipment;
(C)
the purchase price for the machinery and equipment;
(D)
the total purchase price for all machinery and equipment for which the
taxpayer is claiming a tax credit;
(E)
a statement that the machinery and equipment are integral to the composting
or recycling process; and
(F)
the amount of the taxpayer's tax credit; and
(iii)
for a claim of the tax credit described in Subsection
(1)(b)
:
(A)
the type of net expenditure that the taxpayer made to a third party;
(B)
the date that the taxpayer made the payment to a third party;
(C)
the amount that the taxpayer paid to each third party;
(D)
the total amount that the taxpayer paid to all third parties;
(E)
a statement that the net expenditures support the establishment and operation
of recycling or composting technology in the state; and
(F)
the amount of the taxpayer's tax credit.
(b)
(i)
The Department of Environmental Quality shall provide a taxpayer seeking to
claim a tax credit under Subsection
(1)
with a copy of the written certification.
(ii)
The taxpayer shall retain a copy of the written certification for the same period of
time that a person is required to keep books and records under Section
59-1-1406
.
(c)
The Department of Environmental Quality shall submit to the commission an
electronic list that includes:
(i)
the name and identifying information of each taxpayer to which the Department of
Environmental Quality issues a written certification; and
(ii)
for each taxpayer, the amount of each tax credit listed on the written certification.
(3)
A taxpayer may not claim a tax credit under Subsection
(1)(a)
, Subsection
(1)(b)
, or
both that exceeds 40% of the taxpayer's state income tax liability as the tax liability is
calculated:
(a)
for the taxable year in which the taxpayer made the purchases or payments;
(b)
before any other tax credits the taxpayer may claim for the taxable year; and
(c)
before the taxpayer claims a tax credit authorized by this section.
(4)
The commission shall make rules governing what information a taxpayer shall file with
the commission to verify the entitlement to and amount of a tax credit.
(5)
Except as provided in Subsections
(6)

through
(8)
and (7)
, a taxpayer may carry
forward, to the next three taxable years, the amount of a tax credit described in
Subsection
(1)(a)
that the taxpayer does not use for the taxable year.
(6)
A taxpayer may not claim or carry forward a tax credit described in Subsection
(1)(a)
in
a taxable year during which the taxpayer claims or carries forward a tax credit under
Section
63N-2-213
.
(7)
A taxpayer may not claim a tax credit described in Subsection
(1)(b)
in a taxable year
during which the taxpayer claims or carries forward a tax credit under Section
63N-2-213
.
Section 8. Section
59-7-701
is amended to read:
59-7-701
. Taxation of S corporations.
(1)
Except as provided in Section
59-7-102
and subject to the other provisions of this part,
beginning on July 1, 1994, and ending on the last day of the taxable year that begins on
or after January 1, 2012, but begins on or before December 31, 2012, an S corporation is
subject to taxation in the same manner as that S corporation is taxed under Subchapter S
- Tax Treatment of S Corporations and Their Shareholders, Sec. 1361 et seq., Internal
Revenue Code.
(2)
An S corporation is taxed at the
income
tax rate
provided in Section
59-7-104
.
(3)
The business income and nonbusiness income of an S corporation is subject to
Part 3,
Allocation and Apportionment of Income - Utah UDITPA Provisions
.
(4)
An S corporation having income derived from or connected with Utah sources shall
make a return in accordance with Sections
59-10-507
and
59-10-514
.
(5)
An S corporation shall make payments of estimated tax as required by Section
59-7-504
.
(6)
An S corporation is subject to
Chapter 10, Part 14, Pass-Through Entities and
Pass-Through Entity Taxpayers Act
.
(7)
A pass-through entity taxpayer as defined in Section
59-10-1402
of an S corporation is
subject to
Chapter 10, Part 14, Pass-Through Entities and Pass-Through Entity
Taxpayers Act
.
(8)
Provisions under this chapter governing the following apply to an S corporation:
(a)
an assessment;
(b)
a penalty;
(c)
a refund; or
(d)
a record required for an S corporation.
Section 9. Section
59-7-802
is amended to read:
59-7-802
. Taxation of unrelated business income.
(1)
An organization
which
that
is exempt from taxation as provided in Subsection
59-7-102(1)
or Section
59-10-126
shall be subject to the tax imposed by this part on
its
the organization's
Utah unrelated business income.
(2)
Utah unrelated business income shall be taxed at the
income tax
rate
provided in
Section
59-7-104

except that the minimum tax does not apply to organizations subject
to the tax under this part.
Section 10. Section
59-10-104
is amended to read:
59-10-104
. Tax basis -- Tax rate -- Exemption.
(1)
A tax is imposed on the state taxable income of a resident individual as provided in this
section.
(2)
For purposes of Subsection
(1)
, for a taxable year, the tax is an amount equal to the
product of:
(a)
the resident individual's state taxable income for that taxable year; and
(b)
the income tax rate.
(b)
4.5%.
(3)
This section does not apply to a resident individual exempt from taxation under Section
59-10-104.1
.
Section 11. Section
59-10-116
is amended to read:
59-10-116
. Tax on nonresident individual -- Calculation -- Exemption.
(1)
Except as provided in Subsection
(2)
, a tax is imposed on a nonresident individual in an
amount equal to the product of

the
:
(a)
the
nonresident individual's state taxable income; and
(b)
percentage listed in Subsection
59-10-104(2)
.
the income tax rate.
(2)
This section does not apply to a nonresident individual:
(a)
exempt from taxation under Section
59-10-104.1
; or
(b)
whose only state source income is wages that are excluded in accordance with
Section
59-10-117.5
.
Section 12. Section
59-10-201
is amended to read:
59-10-201
. Taxation of resident trusts and estates.
(1)
Except as provided in Subsection
(2)
, a tax
determined in accordance with the rate
prescribed by Subsection
59-10-104(2)(b)

is imposed for each taxable year on
the state
taxable income of
each resident estate or trust
in the amount equal to the income tax
rate multiplied by the resident estate's or trust's state taxable income
.
(2)
The following are not subject to a tax imposed by this part:
(a)
a resident estate or trust that is not required to file a federal income tax return for
estates and trusts for the taxable year; or
(b)
a resident trust taxed as a corporation.
(3)
A resident estate or trust shall be allowed the credit provided in Section
59-10-1003
,
relating to an income tax imposed by another state, except that the limitation shall be
computed by reference to the taxable income of the estate or trust.
(4)
The property of the Utah Educational Savings Plan established in Title 53H, Chapter 10
,

Utah Education Savings, and the Utah Educational Savings Plan's income from
operations and investments are exempt from all taxation by the state under this chapter.
Section 13. Section
59-10-205
is amended to read:
59-10-205
. Tax on nonresident estate or trust.
(1)
Except as provided in Subsection
(2)
, a tax is imposed on a nonresident estate or trust in
an amount equal to the product of:
(a)
the nonresident estate's or trust's state taxable income as determined under Section
59-10-204
; and
(b)
the
percentage listed in Subsection
59-10-104(2)
income tax rate
.
(2)
The following are not subject to a tax imposed by this part:
(a)
a nonresident estate or trust that is not required to file a federal income tax return for
estates and trusts for the taxable year; or
(b)
a nonresident trust taxed as a corporation.
Section 14. Section
59-10-1007
is amended to read:
59-10-1007
. Recycling market development zones tax credits.
(1)
Subject to other provisions of this section, a claimant, estate, or trust in a recycling
market development zone as defined in Section
19-13-102
may claim the following
nonrefundable tax credits:
(a)
a tax credit equal to the product of the
percentage listed in Subsection
59-10-104(2)
income tax rate
and the purchase price paid for machinery and equipment used
directly in:
(i)
commercial composting; or
(ii)
manufacturing facilities or plant units that:
(A)
manufacture, process, compound, or produce recycled items of tangible
personal property for sale; or
(B)
reduce or reuse postconsumer waste material; and
(b)
a tax credit equal to the lesser of:
(i)
20% of net expenditures to third parties for rent, wages, supplies, tools, test
inventory, and utilities made by the claimant, estate, or trust for establishing and
operating recycling or composting technology in the state; and
(ii)
$2,000.
(2)
(a)
To claim a tax credit described in Subsection
(1)
, the claimant, estate, or trust
shall receive from the Department of Environmental Quality a written certification,
on a form
approved by
the commission
approves
, that includes:
(i)
a statement that the claimant, estate, or trust is operating within the boundaries of
a recycling market development zone;
(ii)
for a claim of the tax credit described in Subsection
(1)(a)
:
(A)
the type of the machinery and equipment that the claimant, estate, or trust
purchased;
(B)
the date that the claimant, estate, or trust purchased the machinery and
equipment;
(C)
the purchase price for the machinery and equipment;
(D)
the total purchase price for all machinery and equipment for which the
claimant, estate, or trust is claiming a tax credit;
(E)
the amount of the claimant's, estate's, or trust's tax credit; and
(F)
a statement that the machinery and equipment are integral to the composting
or recycling process; and
(iii)
for a claim of the tax credit described in Subsection
(1)(b)
:
(A)
the type of net expenditure that the claimant, estate, or trust made to a third
party;
(B)
the date that the claimant, estate, or trust made the payment to a third party;
(C)
the amount that the claimant, estate, or trust paid to each third party;
(D)
the total amount that the claimant, estate, or trust paid to all third parties;
(E)
a statement that the net expenditures support the establishment and operation
of recycling or composting technology in the state; and
(F)
the amount of the claimant's, estate's, or trust's tax credit.
(b)
(i)
The Department of Environmental Quality shall provide a claimant, estate, or
trust seeking to claim a tax credit under Subsection
(1)
with a copy of the written
certification.
(ii)
The claimant, estate, or trust shall retain a copy of the written certification for the
same period of time that a person is required to keep books and records under
Section
59-1-1406
.
(c)
The Department of Environmental Quality shall submit to the commission an
electronic list that includes:
(i)
the name and identifying information of each claimant, estate, or trust to which the
Department of Environmental Quality issues a written certification; and
(ii)
for each claimant, estate, or trust, the amount of each tax credit listed on the
written certification.
(3)
A claimant, estate, or trust may not claim a tax credit under Subsection
(1)(a)
,
Subsection
(1)(b)
, or both that exceeds 40% of the claimant's, estate's, or trust's state
income tax liability as the tax liability is calculated:
(a)
for the taxable year in which the claimant, estate, or trust made the purchases or
payments;
(b)
before any other tax credits the claimant, estate, or trust may claim for the taxable
year; and
(c)
before the claimant, estate, or trust claims a tax credit authorized by this section.
(4)
The commission shall make rules governing what information a claimant, estate, or trust
shall file with the commission to verify the entitlement to and amount of a tax credit.
(5)
Except as provided in Subsections
(6)

through
(8)
and (7)
, a claimant, estate, or trust
may carry forward, to the next three taxable years, the amount of a tax credit described
in Subsection
(1)(a)
that the claimant, estate, or trust does not use for the taxable year.
(6)
A claimant, estate, or trust may not claim or carry forward a tax credit described in
Subsection
(1)(a)
in a taxable year during which the claimant, estate, or trust claims or
carries forward a tax credit under Section
63N-2-213
.
(7)
A claimant, estate, or trust may not claim a tax credit described in Subsection
(1)(b)
in a
taxable year during which the claimant, estate, or trust claims or carries forward a tax
credit under Section
63N-2-213
.
Section 15. Section
59-10-1017
is amended to read:
59-10-1017
. Utah Educational Savings Plan tax credit.
(1)
As used in this section:
(a)
"Account owner" means the same as that term is defined in Section
53H-10-101
.
(b)
"Grantor trust" means the same as that term is defined in Section
53H-10-201
.
(c)
"Higher education costs" means the same as that term is defined in Section
53H-10-201
.
(d)
"Maximum amount of a qualified investment for the taxable year" means, for a
taxable year, the product of the
percentage listed in Subsection
59-10-104(2)
income
tax rate
and:
(i)
subject to Subsection
(1)(d)(iii)
, for a claimant, estate, or trust that is an account
owner, if that claimant, estate, or trust is other than husband and wife account
owners who file a single return jointly, the maximum amount of a qualified
investment:
(A)
listed in Subsection
53H-10-205(1)(e)(ii)
; and
(B)
increased or kept for that taxable year in accordance with Subsections
53H-10-205(1)(f)
and
(g)
;
(ii)
subject to Subsection
(1)(d)(iii)
, for claimants who are husband and wife account
owners who file a single return jointly, the maximum amount of a qualified
investment:
(A)
listed in Subsection
53H-10-205(1)(e)(iii)
; and
(B)
increased or kept for that taxable year in accordance with Subsections
53H-10-205(1)(f)
and
(g)
; or
(iii)
for a grantor trust:
(A)
if the owner of the grantor trust has a single filing status or head of household
filing status as defined in Section
59-10-1018
, the amount described in
Subsection
(1)(d)(i)
; or
(B)
if the owner of the grantor trust has a joint filing status as defined in Section
59-10-1018
, the amount described in Subsection
(1)(d)(ii)
.
(e)
"Owner of the grantor trust" means the same as that term is defined in Section
53H-10-201
.
(f)
"Qualified investment" means the same as that term is defined in Section
53H-10-201
.
(2)
Except as provided in Section
59-10-1002.2
and subject to the other provisions of this
section, a claimant, estate, or trust that is an account owner may claim a nonrefundable
tax credit equal to the product of:
(a)
the amount of a qualified investment made:
(i)
during the taxable year; and
(ii)
into an account owned by the claimant, estate, or trust; and
(b)
the percentage listed in Subsection
59-10-104(2)
.
(b)
the income tax rate.
(3)
A claimant, estate, or trust, or a person other than the claimant, estate, or trust, may
make a qualified investment described in Subsection
(2)
.
(4)
A claimant, estate, or trust that is an account owner may not claim a tax credit under this
section with respect to any portion of a qualified investment described in Subsection
(2)

that a claimant, estate, trust, or person described in Subsection
(3)
deducts on a federal
income tax return.
(5)
A tax credit under this section may not exceed the maximum amount of a qualified
investment for the taxable year.
(6)
A claimant, estate, or trust that is an account owner may not carry forward or carry back
the tax credit under this section.
Section 16. Section
59-10-1022
is amended to read:
59-10-1022
. Nonrefundable tax credit for capital gain transactions.
(1)
As used in this section:
(a)
(i)
"Capital gain transaction" means a transaction that results in a:
(A)
(i)
short-term capital gain; or
(B)
(ii)
long-term capital gain.
(ii)
In accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
,
the commission may by rule define the term "transaction."
(b)
"Commercial domicile" means the principal place from which the trade or business
of a Utah small business corporation is directed or managed.
(c)
"Long-term capital gain"
is as
means the same as that term is
defined in Section
1222, Internal Revenue Code.
(d)
"Qualifying stock" means stock that is:
(i)
(A)
common; or
(B)
preferred;
(ii)
as defined by the commission by rule made in accordance with
Title 63G,
Chapter 3, Utah Administrative Rulemaking Act
,
originally issued to:
(A)
a claimant, estate, or trust; or
(B)
a partnership if the claimant, estate, or trust that claims a tax credit under this
section:
(I)
was a partner on the day on which the stock was issued; and
(II)
remains a partner until the last day of the taxable year for which the
claimant, estate, or trust claims a tax credit under this section; and
(iii)
issued:
(A)
by a Utah small business corporation;
(B)
on or after January 1, 2008; and
(C)
for
:
money or other property, except for stock or securities.
(I)
money; or
(II)
other property, except for stock or securities.
(e)
"Short-term capital gain"
is as
means the same as that term is
defined in Section
1222, Internal Revenue Code.
(f)
(i)
"Utah small business corporation" means a corporation that:
(A)
except as provided in Subsection
(1)(f)(ii)
, is a small business corporation as
defined in Section 1244(c)(3), Internal Revenue Code;
(B)
except as provided in Subsection
(1)(f)(iii)
, meets the requirements of Section
1244(c)(1)(C), Internal Revenue Code; and
(C)
has
its
the corporation's
commercial domicile in this state.
(ii)
The dollar amount listed in Section 1244(c)(3)(A)
, Internal Revenue Code,
is
considered to be $2,500,000.
(iii)
The phrase "the date the loss on such stock was sustained" in Sections
1244(c)(1)(C) and 1244(c)(2), Internal Revenue Code, is considered to be "the last
day of the taxable year for which the claimant, estate, or trust claims a tax credit
under this section."
(2)
For taxable years beginning on or after January 1, 2008, a
A
claimant, estate, or trust
that meets the requirements of Subsection
(3)
may claim a nonrefundable tax credit
equal to the product of:
(a)
the total amount of the claimant's, estate's, or trust's short-term capital gain or
long-term capital gain on a capital gain transaction that occurs on or after January 1,
2008; and
(b)
the income tax rate.
(b)
the percentage listed in Subsection
59-10-104(2)
.
(3)
For purposes of Subsection
(2)
, a claimant, estate, or trust may claim the nonrefundable
tax credit allowed by Subsection
(2)
if:
(a)
70% or more of the gross proceeds of the capital gain transaction are expended:
(i)
to purchase qualifying stock in a Utah small business corporation; and
(ii)
within a 12-month period after the day on which the capital gain transaction
occurs; and
(b)
prior to
before
the purchase of the qualifying stock described in Subsection
(3)(a)(i)
,
the claimant, estate, or trust did not have an ownership interest in the Utah small
business corporation that issued the qualifying stock.
(4)
A claimant, estate, or trust may not carry forward or carry back a tax credit under this
section.
(5)
In accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
, the
commission may make rules:
(a)
defining the
term
terms:

(i)
"gross proceeds";
(ii)
"transaction"; or
(iii)
"originally issued";
and
(b)
prescribing
providing
the circumstances under which a claimant, estate, or trust has
an ownership interest in a Utah small business corporation.
Section 17. Section
59-10-1023
is amended to read:
59-10-1023
. Nonrefundable tax credit for amounts paid under a health benefit
plan.
(1)
As used in this section:
(a)
"Claimant with dependents" means a claimant:
(i)
regardless of the claimant's filing status for purposes of filing a federal individual
income tax return for the taxable year; and
(ii)
who claims one or more dependents under Section 151, Internal Revenue Code,
as allowed on the claimant's federal individual income tax return for the taxable
year.
(b)
"Eligible insured individual" means:
(i)
the claimant who is insured under a health benefit plan;
(ii)
the spouse of the claimant described in Subsection
(1)(b)(i)
if:
(A)
the claimant files a single return jointly under this chapter with the claimant's
spouse for the taxable year; and
(B)
the spouse is insured under the health benefit plan described in Subsection
(1)(b)(i)
; or
(iii)
a dependent of the claimant described in Subsection
(1)(b)(i)
if:
(A)
the claimant claims the dependent under Section 151, Internal Revenue Code,
as allowed on the claimant's federal individual income tax return for the
taxable year; and
(B)
the dependent is insured under the health benefit plan described in Subsection
(1)(b)(i)
.
(c)
"Excluded expenses" means an amount a claimant pays for insurance offered under a
health benefit plan for a taxable year if:
(i)
the claimant claims a tax credit for that amount under Section 35, Internal
Revenue Code:
(A)
on the claimant's federal individual income tax return for the taxable year; and
(B)
with respect to an eligible insured individual;
(ii)
the claimant deducts that amount under Section 162 or 213, Internal Revenue
Code:
(A)
on the claimant's federal individual income tax return for the taxable year; and
(B)
with respect to an eligible insured individual; or
(iii)
the claimant excludes that amount from gross income under Section 106 or 125,
Internal Revenue Code, with respect to an eligible insured individual.
(d)
(i)
"Health benefit plan"
is as
means the same as that term is
defined in Section
31A-1-301
.
(ii)
"Health benefit plan" does not include equivalent self-insurance as defined by the
Insurance Department by rule made in accordance with
Title 63G, Chapter 3, Utah
Administrative Rulemaking Act
.
(e)
"Joint claimant with no dependents" means
a husband and wife
spouses
who:
(i)
file a single return jointly under this chapter for the taxable year; and
(ii)
do not claim a dependent under Section 151, Internal Revenue Code, on the
husband's and wife's
spouses'
federal individual income tax return for the taxable
year.
(f)
"Single claimant with no dependents" means:
(i)
a single individual who:
(A)
files a single federal individual income tax return for the taxable year; and
(B)
does not claim a dependent under Section 151, Internal Revenue Code, on the
single individual's federal individual income tax return for the taxable year;
(ii)
a head of household:
(A)
as defined in Section 2(b), Internal Revenue Code, who files a single federal
individual income tax return for the taxable year; and
(B)
who does not claim a dependent under Section 151, Internal Revenue Code,
on the head of household's federal individual income tax return for the taxable
year; or
(iii)
a married individual who:
(A)
does not file a single federal individual income tax return jointly with that
married individual's spouse for the taxable year; and
(B)
does not claim a dependent under Section 151, Internal Revenue Code, on that
married individual's federal individual income tax return for the taxable year.
(2)
Subject to Subsection
(3)
, and except as provided in Subsection
(4)
,
for taxable years
beginning on or after January 1, 2009,
a claimant may claim a nonrefundable tax credit
equal to the product of:
(a)
the difference between:
(i)
the total amount the claimant pays during the taxable year for:
(A)
insurance offered under a health benefit plan; and
(B)
an eligible insured individual; and
(ii)
excluded expenses; and
(b)
the income tax rate.
(b)
the percentage listed in Subsection
59-10-104(2)
.
(3)
The maximum amount of a tax credit described in Subsection
(2)
a claimant may claim
on a return for a taxable year is:
(a)
for a single claimant with no dependents, $300;
(b)
for a joint claimant with no dependents, $600; or
(c)
for a claimant with dependents, $900.
(4)
A claimant may not claim a tax credit under this section if the claimant is eligible to
participate in insurance offered under a health benefit plan maintained and funded in
whole or in part by:
(a)
the claimant's employer; or
(b)
another person's employer.
(5)
A claimant may not carry forward or carry back a tax credit under this section.
Section 18. Section
59-10-1028
is amended to read:
59-10-1028
. Nonrefundable tax credit for capital gain transactions on the
exchange of one form of legal tender for another form of legal tender.
(1)
As used in this section:
(a)
"Capital gain transaction" means a transaction that results in a:
(i)
short-term capital gain; or
(ii)
long-term capital gain.
(b)
"Long-term capital gain"
is as
means the same as that term is
defined in Section
1222, Internal Revenue Code.
(c)
"Long-term capital loss"
is as
means the same as that term is
defined in Section
1222, Internal Revenue Code.
(d)
"Net capital gain" means the amount by which the sum of long-term capital gains
and short-term capital gains on a claimant's, estate's, or trust's transactions from
exchanges made for a taxable year of one form of legal tender for another form of
legal tender exceeds the sum of long-term capital losses and short-term capital losses
on those transactions for that taxable year.
(e)
"Short-term capital loss" is as defined in Section 1222, Internal Revenue Code.
(f)
(e)
"Short-term capital gain"
is as
means the same as that term is
defined in Section
1222, Internal Revenue Code.
(f)
"Short-term capital loss" means the same as that term is defined in Section 1222,
Internal Revenue Code.
(2)
Except as provided in Section
59-10-1002.2
,
for taxable years beginning on or after
January 1, 2012,
a claimant, estate, or trust may claim a nonrefundable tax credit equal
to the product of:
(a)
to the extent a net capital gain is included in taxable income, the amount of the
claimant's, estate's, or trust's net capital gain on capital gain transactions from
exchanges made on or after January 1, 2012, for a taxable year, of one form of legal
tender for another form of legal tender; and
(b)
the percentage listed in Subsection
59-10-104(2)
.
(b)
the income tax rate.
(3)
A claimant, estate, or trust may not carry forward or carry back a tax credit under this
section.
(4)
In accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
, the
commission may make rules to implement this section.
Section 19. Section
59-10-1035
is amended to read:
59-10-1035
. Nonrefundable tax credit for contribution to state Achieving a
Better Life Experience Program account.
(1)
As used in this section:
(a)
"Account" means an account in a qualified ABLE program where the designated
beneficiary of the account is a resident of this state.
(b)
"Contributor" means a claimant, estate, or trust that:
(i)
makes a contribution to an account; and
(ii)
receives a statement from the qualified ABLE program itemizing the contribution.
(c)
"Designated beneficiary" means the same as that term is defined in 26 U.S.C. Sec.
529A.
(d)
"Qualified ABLE program" means the same as that term is defined in Section
35A-12-102
.
(2)
A contributor to an account may claim a nonrefundable tax credit as provided in this
section.
(3)
Subject to the other provisions of this section, the tax credit is equal to the product of:
(a)
the percentage listed in Subsection
59-10-104(2)
; and
(a)
the income tax rate; and
(b)
the total amount of contributions:
(i)
the contributor makes for the taxable year; and
(ii)
for which the contributor receives a statement from the qualified ABLE program
itemizing the contributions.
(4)
A contributor may not claim a tax credit under this section:
(a)
for an amount of excess contribution to an account that is returned to the contributor;
or
(b)
with respect to an amount the contributor deducts on a federal income tax return.
(5)
A
contributor may not carry forward or carry back a
tax credit under this section
may
not be carried forward or carried back
.
Section 20. Section
59-10-1036
is amended to read:
59-10-1036
. Nonrefundable tax credit for military survivor benefits.
(1)
As used in this section:
(a)
"Dependent child" means the same as that term is defined in 10 U.S.C. Sec. 1447.
(b)
"Reserve components" means the same as that term is described in 10 U.S.C. Sec.
10101.
(c)
"Surviving spouse" means the same as that term is defined in 10 U.S.C. Sec. 1447.
(d)
"Survivor benefits" means the amount paid by the federal government in accordance
with 10 U.S.C. Secs. 1447 through 1455.
(2)
A surviving spouse or
a
dependent child may claim a nonrefundable tax credit for
survivor benefits if the benefits are paid due to:
(a)
the death of a member of the armed forces or reserve components while on active
duty; or
(b)
the death of a member of the reserve components that results from a
service-connected cause while performing inactive duty training.
(3)
The tax credit described in Subsection
(2)
is equal to the product of:
(a)
the amount of survivor benefits that the surviving spouse or dependent child received
during the taxable year; and
(b)
the income tax rate.
(b)
the percentage listed in Subsection
59-10-104(2)
.
(4)
The tax credit described in Subsection
(2)
:
A surviving spouse or a dependent child
may not carry forward or carry back a tax credit under this section.
(a)
may not be carried forward or carried back; and
(b)
applies to a taxable year beginning on or after January 1, 2017.
Section 21. Section
59-10-1042
is amended to read:
59-10-1042
. Nonrefundable tax credit for social security benefits.
(1)
As used in this section:
(a)
"Head of household filing status" means the same as that term is defined in Section
59-10-1018
.
(b)
"Joint filing status" means the same as that term is defined in Section
59-10-1018
.
(c)
"Married filing separately status" means a married individual who:
(i)
does not file a single federal individual income tax return jointly with that married
individual's spouse for the taxable year; and
(ii)
files a single federal individual income tax return for the taxable year.
(d)
"Modified adjusted gross income" means the sum of the following for a claimant or,
if the claimant's return under this chapter is allowed a joint filing status, the claimant
and the claimant's spouse:
(i)
adjusted gross income for the taxable year for which a tax credit is claimed under
this section;
(ii)
any interest income that is not included in adjusted gross income for the taxable
year described in Subsection
(1)(d)(i)
; and
(iii)
any addition to adjusted gross income required by Section
59-10-114
for the
taxable year described in Subsection
(1)(d)(i)
.
(e)
"Single filing status" means a single individual who files a single federal individual
income tax return for the taxable year.
(f)
"Social security benefit" means an amount received by a claimant as a monthly
benefit in accordance with the Social Security Act, 42 U.S.C. Sec. 401 et seq.
(2)
Except as provided in Section
59-10-1002.2
and Subsections
(3)
and
(4)
, each claimant
on a return that receives a social security benefit may claim a nonrefundable tax credit
against taxes otherwise due under this part equal to the product of:
(a)
the percentage listed in Subsection
59-10-104(2)
; and
(a)
the income tax rate; and
(b)
the claimant's social security benefit that is included in the claimant's state taxable
income for the taxable year.
(3)
A claimant may not:
(a)
carry forward or carry back the amount of a tax credit under this section that exceeds
the claimant's tax liability for the taxable year; or
(b)
claim a tax credit under this section for a taxable year if a tax credit under Section
59-10-1019
is claimed on the claimant's return for the same taxable year.
(4)
The tax credit allowed by Subsection
(2)
claimed on a return filed under this part
shall
be
is
reduced by $.025 for each dollar by which modified adjusted gross income for
purposes of the return exceeds:
(a)
for a return filed under this chapter that is allowed a married filing separately status,
$45,000;
(b)
for a return filed under this chapter that is allowed a single filing status, $54,000;
(c)
for a return filed under this chapter that is allowed a head of household filing status,
$90,000; or
(d)
for a return filed under this chapter that is allowed a joint filing status, $90,000.
(5)
In accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
, the
commission may make rules governing the calculation and method for claiming the tax
credit described in this section.
Section 22. Section
59-10-1043
is amended to read:
59-10-1043
. Nonrefundable tax credit for military retirement.
(1)
As used in this section:
(a)
(i)
"Military retirement pay" means retirement pay, including survivor benefits,
that relates to service in the armed forces or the reserve components, as described
in 10 U.S.C. Sec. 10101.
(ii)
"Military retirement pay" does not include:
(A)
Social Security
social security
income;
(B)
401(k) or IRA distributions; or
(C)
income from other sources.
(b)
"Survivor benefits" means the retired pay portion of the benefits described in 10
U.S.C. Secs. 1447 through 1455.
(2)
Except as provided in Section
59-10-1002.2
, a claimant who receives military
retirement pay may claim a nonrefundable tax credit against taxes equal to the product
of:
(a)
the percentage listed in Subsection
59-10-104(2)
; and
(a)
the income tax rate; and
(b)
the amount of military retirement pay that is included in adjusted gross income on
the claimant's federal income tax return for the taxable year.
(3)
A claimant may not:
(a)
carry forward or carry back the amount of a tax credit that exceeds the claimant's tax
liability for the taxable year; or
(b)
claim a tax credit under this section for a taxable year if a tax credit under Section
59-10-1019
is claimed on the claimant's return for the same taxable year.
Section 23. Section
59-10-1403.2
is amended to read:
59-10-1403.2
. Pass-through entity payment or withholding of tax on behalf of a
pass-through entity taxpayer -- Exceptions to payment or withholding requirement --
Procedures and requirements -- Failure to pay or withhold a tax on behalf of a
pass-through entity taxpayer.
(1)
(a)
Except as provided in Subsections
(1)(b)
and
(2)
, for a taxable year, a
pass-through entity shall pay or withhold a tax:
(i)
on:
(A)
the business income of the pass-through entity; and
(B)
the nonbusiness income of the pass-through entity derived from or connected
with Utah sources; and
(ii)
on behalf of a pass-through entity taxpayer.
(b)
A pass-through entity is not required to pay or withhold a tax under Subsection
(1)(a)
:
(i)
on behalf of a final pass-through entity taxpayer who is a resident individual;
(ii)
if the pass-through entity is an organization exempt from taxation under
Subsection
59-7-102(1)(a)
;
(iii)
if the pass-through entity:
(A)
is a plan under Section 401, 408, or 457, Internal Revenue Code; and
(B)
is not required to file a return under
Chapter 7, Corporate Franchise and
Income Taxes
, or this chapter;
(iv)
if the pass-through entity is a publicly traded partnership:
(A)
as defined in Section 7704(b), Internal Revenue Code;
(B)
that is classified as a partnership for federal income tax purposes; and
(C)
that files an annual information return reporting the following with respect to
each partner of the publicly traded partnership with income derived from or
connected with Utah sources that exceeds $500 in a taxable year:
(I)
the partner's name;
(II)
the partner's address;
(III)
the partner's taxpayer identification number; and
(IV)
other information required by the commission; or
(v)
on behalf of a final pass-through entity taxpayer that is a nonresident individual if
the pass-through entity pays the tax described in Subsection
(2)
.
(2)
(a)
For each taxable year that begins on or after January 1, 2022, but begins on or
before December 31, 2025, a pass-through entity that is not a disregarded
pass-through entity may elect to pay a tax in an amount equal to the product of:
(i)
the percentage listed in Subsection
59-10-104(2)
; and
(i)
the income tax rate; and
(ii)
voluntary taxable income.
(b)
A pass-through entity that elects to pay the tax in accordance with Subsection
(2)(a)

shall notify any final pass-through entity taxpayer of that election.
(c)
A pass-through entity that pays a tax described in Subsection
(2)(a)
shall provide to
each final pass-through entity taxpayer a statement that states:
(i)
the amount of tax paid under Subsection
(2)(a)
on the income attributed to the
final pass-through entity taxpayer; and
(ii)
the amount of tax paid to another state by the pass-through entity on income:
(A)
attributed to the final pass-through entity taxpayer; and
(B)
that the commission determines is substantially similar to the tax under
Subsection
(2)(a)
.
(d)
A payment of the tax described in Subsection
(2)(a)
on or before the last day of the
taxable year:
(i)
is an irrevocable election to be subject to the tax for the taxable year; and
(ii)
may not be refunded.
(3)
(a)
Subject to Subsection
(3)(b)
, the tax a pass-through entity shall pay or withhold on
behalf of a pass-through entity taxpayer for a taxable year is an amount:
(i)
determined by the commission by rule made in accordance with
Title 63G,
Chapter 3, Utah Administrative Rulemaking Act
; and
(ii)
that the commission estimates will be sufficient to pay the tax liability of the
pass-through entity taxpayer under this chapter with respect to the income
described in Subsection
(1)(a)(i)
or
(2)(a)(ii)
of that pass-through entity for the
taxable year.
(b)
The rules the commission makes in accordance with Subsection
(3)(a)
:
(i)
except as provided in Subsection
(3)(c)
:
(A)
shall:
(I)
for a pass-through entity except for a pass-through entity that is an S
corporation, take into account items of income, gain, loss, deduction, and
credit as analyzed on the schedule for reporting partners' distributive share
items as part of the federal income tax return for the pass-through entity; or
(II)
for a pass-through entity that is an S corporation, take into account items of
income, gain, loss, deduction, and credit as reconciled on the schedule for
reporting shareholders' pro rata share items as part of the federal income tax
return for the pass-through entity; and
(B)
notwithstanding Subsection
(3)(b)(ii)(D)
, take into account the refundable tax
credit provided in Section
59-6-102
; and
(ii)
may not take into account the following items if taking those items into account
does not result in an accurate estimate of a pass-through entity taxpayer's tax
liability under this chapter for the taxable year:
(A)
a capital loss;
(B)
a passive loss;
(C)
another item of deduction or loss if that item of deduction or loss is generally
subject to significant reduction or limitation in calculating:
(I)
for a pass-through entity taxpayer that is classified as a C corporation for
federal income tax purposes, unadjusted income as defined in Section
59-7-101
;
(II)
for a pass-through entity that is classified as an individual, partnership, or S
corporation for federal income tax purposes, adjusted gross income; or
(III)
for a pass-through entity that is classified as an estate or a trust for federal
income tax purposes, unadjusted income as defined in Section
59-10-103
; or
(D)
a tax credit allowed against a tax imposed under:
(I)
Chapter 7, Corporate Franchise and Income Taxes
; or
(II)
this chapter.
(c)
The rules the commission makes in accordance with Subsection
(3)(a)
may establish
a method for taking into account items of income, gain, loss, deduction, or credit of a
pass-through entity if:
(i)
for a pass-through entity except for a pass-through entity that is an S corporation,
the pass-through entity does not analyze the items of income, gain, loss,
deduction, or credit on the schedule for reporting partners' distributive share items
as part of the federal income tax return for the pass-through entity; or
(ii)
for a pass-through entity that is an S corporation, the pass-through entity does not
reconcile the items of income, gain, loss, deduction, or credit on the schedule for
reporting shareholders' pro rata share items as part of the federal income tax return
for the pass-through entity.
(4)
(a)
Except as provided in Subsection
(4)(b)
, a pass-through entity shall remit to the
commission the tax the pass-through entity pays or withholds on behalf of a
pass-through entity taxpayer under this section:
(i)
on or before the due date of the pass-through entity's return, not including
extensions; and
(ii)
on a form
provided by
the commission
provides
.
(b)
A pass-through entity shall remit the tax described in Subsection
(2)
on or before the
last day of the pass-through entity's taxable year.
(c)
The commission shall consider only the amount of tax remitted as provided in
Subsection
(4)(b)
, on or before the last day of the pass-through entity's taxable year
as a payment described in Subsection
(2)
.
(d)
Except as provided in Subsection
(1)(b)
, a pass-through entity that files an amended
return under this part shall pay or withhold tax on any increase in the income
described in Subsection
(1)(a)(i)
on behalf of the pass-through entity taxpayer and
remit that tax to the commission.
(5)
A pass-through entity shall provide a statement to a pass-through entity taxpayer on
behalf of whom the pass-through entity pays or withholds a tax under this section
showing the amount of tax the pass-through entity pays or withholds under this section
for the taxable year on behalf of the pass-through entity taxpayer.
(6)
Notwithstanding Section
59-1-401
or
59-1-402
, the commission may not collect an
amount under this section for a taxable year from a pass-through entity and shall waive
any penalty and interest on that amount if:
(a)
the pass-through entity fails to pay or withhold the tax on the amount as required by
this section on behalf of the pass-through entity taxpayer;
(b)
the pass-through entity taxpayer:
(i)
files a return on or before the due date for filing the pass-through entity's return,
including extensions; and
(ii)
on or before the due date including extensions described in Subsection
(6)(b)(i)
,
pays the tax on the amount for the taxable year:
(A)
if the pass-through entity taxpayer is classified as a C corporation for federal
income tax purposes, under
Chapter 7, Corporate Franchise and Income Taxes
;
or
(B)
if the pass-through entity taxpayer is classified as an estate, individual,
partnership, S corporation, or a trust for federal income tax purposes, under this
chapter; and
(c)
the pass-through entity applies to the commission.
(7)
Notwithstanding Section
59-1-401
or
59-1-402
, the commission may not collect an
amount under this section for a taxable year from a pass-through entity that is a trust and
shall waive any penalty and interest on that amount if:
(a)
the pass-through entity fails to pay or withhold the tax on the amount as required by
this section on behalf of a dependent beneficiary;
(b)
the pass-through entity applies to the commission; and
(c)
(i)
the dependent beneficiary complies with the requirements of Subsection
(6)(b)
;
or
(ii)
(A)
the dependent beneficiary's adjusted gross income for the taxable year does
not exceed the basic standard deduction for the dependent beneficiary, as
calculated under Section 63, Internal Revenue Code, for that taxable year; and
(B)
the trustee of the trust retains a statement of dependent beneficiary income on
behalf of the dependent beneficiary.
(8)
If a pass-through entity would have otherwise qualified for a waiver of a penalty and
interest under Subsection
(7)
, except that the trustee of a trust has not applied to the
commission as required by Subsection
(7)(b)
or retained the statement of dependent
beneficiary income required by Subsection
(7)(c)(ii)(B)
, it is a rebuttable presumption in
an audit that the pass-through entity would have otherwise qualified for the waiver of the
penalty and interest under Subsection
(7)
.
Section 24. Section
59-10-1403.3
is amended to read:
59-10-1403.3
. Refund of amounts paid or withheld for a pass-through entity.
(1)
As used in this section
:
,
(a)
"Committee" means the Revenue and Taxation Interim Committee.
(b)
"Qualifying
"qualifying
excess withholding" means an amount that:
(i)
(a)
is paid or withheld:
(A)
(i)
by a pass-through entity that has a different taxable year than the
pass-through entity that requests a refund under this section; and
(B)
(ii)
on behalf of the pass-through entity that requests the refund, if the
pass-through entity that requests the refund also is a pass-through entity taxpayer;
and
(ii)
(b)
is equal to the difference between:
(A)
(i)
the amount paid or withheld for the taxable year on behalf of the
pass-through entity that requests the refund; and
(B)
(ii)
the product of the
p
ercentage listed in Subsection
59-10-104(2)
income
tax rate
and the income, described in Subsection
59-10-1403.2(1)(a)(i)
, of the
pass-through entity that requests the refund.
(2)
For a taxable year ending on or after July 1, 2017, a
A
pass-through entity may claim a
refund of qualifying excess withholding, if the amount of the qualifying excess
withholding is equal to or greater than $250,000.
(3)
A pass-through entity that requests a refund of qualifying excess withholding under this
section shall:
(a)
apply to the commission for a refund on or, subject to Subsection
(4)
, after the day
on which the pass-through entity files the pass-through entity's income tax return; and
(b)
provide any information that the commission may require to determine that the
pass-through entity is eligible to receive the refund.
(4)
A pass-through entity shall claim a refund of qualifying excess withholding under this
section within 30 days after the earlier of the day on which:
(a)
the pass-through entity files an income tax return; or
(b)
the pass-through entity's income tax return is due, including any extension of due
date authorized in statute.
(5)
In accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
, the
commission may make rules establishing the information that a pass-through entity shall
provide to the commission to obtain a refund of qualifying excess withholding under this
section.
(6)
(a)
On or before November 30, 2018, the committee shall review the $250,000
threshold described in Subsection
(2)
for the purpose of assessing whether the
threshold amount should be maintained, increased, or decreased.
(b)
To assist the committee in conducting the review described in Subsection
(6)(a)
, the
commission shall provide the committee with:
(i)
the total number of refund requests made under this section;
(ii)
the total costs of any refunds issued under this section;
(iii)
the costs of any audits conducted on refund requests made under this section;
and
(iv)
an estimation of:
(A)
the number of refund requests the commission expects to receive if the
Legislature increases the threshold;
(B)
the number of refund requests the commission expects to receive if the
Legislature decreases the threshold; and
(C)
the costs of any audits the commission would conduct if the Legislature
increases or decreases the threshold.
Section 25. Section
63I-1-259
is amended to read:
63I-1-259
. Repeal dates: Title 59.
(1)
Subsection
59-1-403(4)(aa)
, regarding a requirement for the State Tax Commission to
inform the Department of Workforce Services whether an individual claimed a federal
earned income tax credit, is repealed July 1, 2029.
(2)
Subsection
59-1-101(3)(a)
, regarding the tax rate for a taxable year beginning on or
after January 1, 2027, and before January 1, 2028, is repealed July 1, 2038.
(3)
Subsection
59-1-101(3)(b)
, regarding the tax rate for a taxable year beginning on or
after January 1, 2028, and before January 1, 2038, is repealed July 1, 2038.
(4)
Title 59, Chapter 1, Part 19, Income Tax Rate, is repealed July 1, 2038.
(2)
(5)
Section
59-2-1603
, Allocation of money in the Property Tax Valuation Fund -- Use
of funds, is repealed July 1, 2030.
(3)
(6)
Section
59-5-304
, Tax credit for mining exploration, is repealed July 1, 2037.
(4)
(7)
Section
59-7-618.1
, Tax credit related to alternative fuel heavy duty vehicles, is
repealed July 1, 2029.
(5)
(8)
Section
59-9-102.5
, Offset for occupational health and safety related donations, is
repealed December 31, 2030.
(6)
(9)
Section
59-10-1033.1
, Tax credit related to alternative fuel heavy duty vehicles, is
repealed July 1, 2029.
(7)
(10)
Subsection
59-28-103(5)
, regarding a tax rate on certain transactions that take
place within a county of the first class, is repealed July 1, 2047.
Section 26.
Effective Date.
(1)
Except as provided in Subsection (2), this bill takes effect for a taxable year beginning
on or after January 1, 2027.
(2)
The actions affecting the following sections take effect on January 1, 2027:
(a)
Section 59-1-101
;
(b)
Section 59-1-1901
;
(c)
Section 59-1-1902
; and
(d)
Section 63I-1-259
.
1-28-26 11:37 AM