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S.B. 223 Enrolled
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TAX AMENDMENTS
2
2007 GENERAL SESSION
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STATE OF UTAH
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Chief Sponsor: Wayne L. Niederhauser
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House Sponsor:
John Dougall
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LONG TITLE
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General Description:
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This bill amends the Revenue and Taxation title and the Rural Health Services chapter.
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Highlighted Provisions:
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This bill:
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. modifies the membership of the Utah Tax Review Commission to include the chairs
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of the Revenue and Taxation Interim Committee;
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. repeals a repeal date for tax credits for research activities in the state;
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. increases the percentage of expenses or payments that serve as the basis for
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calculating tax credits for research activities in the state;
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. provides a nonrefundable tax credit equal to 5% of a taxpayer's qualified research
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expenses for the current taxable year in addition to other tax credits for research
19
activities in the state allowed under current statute;
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. provides that the tax credits for qualified research expenses may not be carried
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forward;
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. requires a review of the tax credits for research activities in the state by the Utah
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Tax Review Commission;
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. extends the availability of the renewable energy tax credit;
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. provides for the Utah Tax Review Commission to review the renewable energy tax
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credit;
27
. expands the renewable energy tax credit to include some geothermal sources;
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. makes the renewable energy tax credit on commercial energy systems a refundable
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tax credit;
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. changes the calculation of the tax credit for commercial energy systems;
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. removes language reimbursing the Uniform School Fund for renewable energy tax
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credits taken;
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. provides that a tax under the Individual Income Tax Act that is imposed on the basis
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of graduated brackets and rates may not be imposed for taxable years beginning on
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or after January 1, 2008;
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. provides and modifies definitions;
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. reduces the single rate individual income tax rate from 5.35% to 5%;
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. enacts a nonrefundable tax credit under the Single Rate Individual Income Tax Act
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allowed on the basis of:
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. the deductions a person claims ; and
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. personal exemptions;
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. enacts nonrefundable retirement tax credits under the Single Rate Individual Income
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Tax Act;
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. phases out the above nonrefundable tax credits under the Single Rate Individual
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Income Tax Act at certain income levels;
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. requires the apportionment of the above nonrefundable tax credits under the Single
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Rate Individual Income Tax Act for a nonresident individual or part-year resident
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individual;
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. modifies the definition of "prosthetic device," the sale of which is exempt from
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sales and use taxation, to include a dental prosthesis;
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. reduces the state sales and use tax rate from 4.75% to 4.65%;
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. reduces the state sales and use tax rate imposed on food and food ingredients,
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except with respect to certain bundled transactions;
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. provides a sales and use tax exemption for certain machinery, equipment, or repair
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or replacement parts purchased or leased by certain establishments relating to
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mining that are listed under the North American Industry Classification System;
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. modifies State Tax Commission rulemaking authority;
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. authorizes certain counties, cities, or towns to increase certain tax rates from .25%
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to .30% and exempts those tax rate increases from voter approval requirements;
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. provides that food and food ingredients are not subject to certain local sales and use
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taxes, except with respect to certain bundled transactions;
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. addresses State Tax Commission notice requirements to enact, repeal, or change the
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tax rate of certain local sales and use taxes;
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. creates a restricted special revenue fund to distribute monies to fund rural health
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care facilities and services that are impacted by providing that food and food
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ingredients are not generally subject to local sales and use taxes for rural health care
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facilities and services, including:
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. addressing the distribution and expenditure of fund revenues; and
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. providing that unexpended monies remaining in the fund at the end of a fiscal
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year lapse into the General Fund;
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. requires the State Tax Commission to provide data to the executive director of the
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Department of Health;
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. increases the maximum tax rate for the resort communities local sales and use tax
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from 1% to 1.1%;
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. enacts an additional state sales and use tax and provides that the revenues collected
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from the tax shall be deposited into the General Fund;
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. provides a nonrefundable tax credit under the Multi-Channel Video or Audio
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Service Tax Act for a multi-channel video or audio service provider;
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. requires a multi-channel video or audio service provider to pass through an amount
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equal to the tax credit to purchasers located within the state;
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. provides that a tax on amounts paid or charged for multi-channel video or audio
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service may not be reduced as a result of the amount a multi-channel video or audio
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service provider passes through to its customers within the state;
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. requires a Revenue and Taxation Interim Committee study on repealing the state
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individual income tax imposed on the basis of graduated brackets and rates; and
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. makes technical changes.
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Monies Appropriated in this Bill:
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This bill appropriates:
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. for fiscal year 2007-08 only, $277,500 from the General Fund to the Rural Health
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Care Facilities Fund; and
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. as an ongoing appropriation subject to future budget constraints, $555,000 from the
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General Fund for fiscal year 2008-09 to the Rural Health Care Facilities Fund.
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Other Special Clauses:
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This bill provides effective dates and provides for retrospective operation.
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This bill provides revisor instructions.
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This bill coordinates with H.B. 27, Sales and Use Tax Modifications, by merging
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substantive amendments.
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Utah Code Sections Affected:
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AMENDS:
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59-1-210, as last amended by Chapter 271, Laws of Utah 1995
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59-1-901, as last amended by Chapter 243, Laws of Utah 1996
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59-7-612, as last amended by Chapter 9, Laws of Utah 2001
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59-10-104, as last amended by Chapter 2, Laws of Utah 2006, Fourth Special Session
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59-10-1012, as renumbered and amended by Chapter 223, Laws of Utah 2006
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59-10-1014, as renumbered and amended by Chapter 223, Laws of Utah 2006
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59-10-1202, as enacted by Chapter 2, Laws of Utah 2006, Fourth Special Session
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59-10-1203, as enacted by Chapter 2, Laws of Utah 2006, Fourth Special Session
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59-12-102, as last amended by Chapter 1, Laws of Utah 2006, Fourth Special Session
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59-12-103, as last amended by Chapter 9, Laws of Utah 2006, Third Special Session
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59-12-104, as last amended by Chapters 181, 182, 217, 218, 219, 220, 246, 268 and
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346, Laws of Utah 2006
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59-12-401, as last amended by Chapter 253, Laws of Utah 2006
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59-12-402, as last amended by Chapter 253, Laws of Utah 2006
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59-12-403, as last amended by Chapter 253, Laws of Utah 2006
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59-12-501, as last amended by Chapter 253, Laws of Utah 2006
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59-12-502, as last amended by Chapters 253 and 329, Laws of Utah 2006
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59-12-504, as last amended by Chapter 253, Laws of Utah 2006
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59-12-703, as last amended by Chapter 253, Laws of Utah 2006
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59-12-802, as last amended by Chapters 253 and 302, Laws of Utah 2006
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59-12-804, as last amended by Chapter 253, Laws of Utah 2006
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59-12-1001, as last amended by Chapter 253, Laws of Utah 2006
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59-12-1302, as last amended by Chapter 253, Laws of Utah 2006
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59-12-1402, as last amended by Chapter 253, Laws of Utah 2006
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59-12-1503, as last amended by Chapter 253, Laws of Utah 2006
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59-12-1703, as enacted by Chapter 1, Laws of Utah 2006, Fourth Special Session
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59-26-102, as enacted by Chapter 300, Laws of Utah 2004
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59-26-103, as enacted by Chapter 300, Laws of Utah 2004
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ENACTS:
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26-9-4, Utah Code Annotated 1953
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59-10-1106, Utah Code Annotated 1953
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59-10-1206.1, Utah Code Annotated 1953
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59-10-1206.2, Utah Code Annotated 1953
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59-10-1206.9, Utah Code Annotated 1953
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59-12-1801, Utah Code Annotated 1953
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59-12-1802, Utah Code Annotated 1953
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59-12-1803, Utah Code Annotated 1953
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59-26-104.5, Utah Code Annotated 1953
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REPEALS AND REENACTS:
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59-7-614, as last amended by Chapter 223, Laws of Utah 2006
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Uncodified Material Affected:
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ENACTS UNCODIFIED MATERIAL
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
26-9-4
is enacted to read:
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26-9-4. Rural Health Care Facilities Fund -- Source of revenues -- Interest --
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Distribution of revenues -- Expenditure of revenues -- Unexpended revenues lapse into
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the General Fund.
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(1) As used in this section:
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(a) "Emergency medical services" is as defined in Section
26-8a-102
.
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(b) "Federally qualified health center" is as defined in 42 U.S.C. Sec. 1395x.
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(c) "Fiscal year" means a one-year period beginning on July 1 of each year.
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(d) "Freestanding urgent care center" is as defined in Section
59-12-801
.
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(e) "Fund" means the Rural Health Care Facilities Fund created by this section.
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(f) "Nursing care facility" is as defined in Section
26-21-2
.
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(g) "Rural city hospital" is as defined in Section
59-12-801
.
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(h) "Rural county health care facility" is as defined in Section
59-12-801
.
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(i) "Rural county hospital" is as defined in Section
59-12-801
.
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(j) "Rural county nursing care facility" is as defined in Section
59-12-801
.
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(k) "Rural emergency medical services" is as defined in Section
59-12-801
.
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(l) "Rural health clinic" is as defined in 42 U.S.C. Sec. 1395x.
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(2) There is created a restricted special revenue fund known as the Rural Health Care
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Facilities Fund.
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(3) (a) The fund shall be funded by amounts appropriated by the Legislature.
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(b) Any interest earned on the fund shall be deposited into the General Fund.
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(4) Subject to Subsection (5), the executive director shall for a fiscal year distribute
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monies deposited into the fund to each:
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(a) county legislative body of a county that, on January 1, 2007, imposes a tax in
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accordance with Section
59-12-802
; or
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(b) city legislative body of a city that, on January 1, 2007, imposes a tax in accordance
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with Section
59-12-804
.
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(5) (a) For purposes of the distribution required by Subsection (4), the executive
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director shall:
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(i) estimate for each county and city described in Subsection (4) the amount by which
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the revenues collected from the taxes imposed under Sections
59-12-802
and
59-12-804
for
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fiscal year 2005-06 would have been reduced had:
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(A) the amendments made by this bill to Sections
59-12-802
and
59-12-804
been in
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effect for fiscal year 2005-06; and
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(B) each county and city described in Subsection (4) imposed the tax under Sections
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59-12-802
and
59-12-804
for the entire fiscal year 2005-06;
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(ii) calculate a percentage for each county and city described in Subsection (4) by
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dividing the amount estimated for each county and city in accordance with Subsection (5)(a)(i)
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by $555,000; and
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(iii) distribute to each county and city described in Subsection (4) an amount equal to
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the product of:
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(A) the percentage calculated in accordance with Subsection (5)(a)(ii); and
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(B) the amount appropriated by the Legislature to the fund for the fiscal year.
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(b) The executive director shall make the estimations, calculations, and distributions
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required by Subsection (5)(a) on the basis of data provided to the executive director by the
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State Tax Commission.
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(6) (a) Subject to Subsection (6)(b), a county legislative body shall distribute the
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monies the county legislative body receives in accordance with Subsection (5):
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(i) for a county of the third, fourth, or fifth class, to fund rural county health care
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facilities in that county; and
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(ii) for a county of the sixth class, to fund:
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(A) emergency medical services in that county;
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(B) federally qualified health centers in that county;
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(C) freestanding urgent care centers in that county;
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(D) rural county health care facilities in that county;
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(E) rural health clinics in that county; or
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(F) a combination of Subsections (6)(a)(ii)(A) through (E).
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(b) A county legislative body shall distribute a percentage of the monies the county
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legislative body receives in accordance with Subsection (5) to each center, clinic, facility, or
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service described in Subsection (6)(a) equal to the same percentage that the county legislative
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body distributes to that center, clinic, facility, or service in accordance with Section
59-12-803
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for the calendar year ending on the December 31 immediately preceding the first day of the
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fiscal year for which the county legislative body receives the distribution in accordance with
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Subsection (5).
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(c) A center, clinic, facility, or service that receives a distribution in accordance with
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this Subsection (6) shall expend that distribution for the same purposes for which monies
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generated by a tax under Section
59-12-802
may be expended.
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(7) (a) Subject to Subsection (7)(b), a city legislative body shall distribute the monies
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the city legislative body receives in accordance with Subsection (5) to fund rural city hospitals
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in that city.
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(b) A city legislative body shall distribute a percentage of the monies the city
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legislative body receives in accordance with Subsection (5) to each rural city hospital described
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in Subsection (7)(a) equal to the same percentage that the city legislative body distributes to
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that rural city hospital in accordance with Section
59-12-805
for the calendar year ending on
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the December 31 immediately preceding the first day of the fiscal year for which the city
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legislative body receives the distribution in accordance with Subsection (5).
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(c) A rural city hospital that receives a distribution in accordance with this Subsection
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(7) shall expend that distribution for the same purposes for which monies generated by a tax
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under Section
59-12-804
may be expended.
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(8) Any monies remaining in the Rural Health Care Facilities Fund at the end of a
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fiscal year after the executive director makes the distributions required by this section shall
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lapse into the General Fund.
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Section 2.
Section
59-1-210
is amended to read:
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59-1-210. General powers and duties.
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The powers and duties of the commission are as follows:
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(1) to sue and be sued in its own name;
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(2) to adopt rules and policies consistent with the Constitution and laws of this state to
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govern the commission, executive director, division directors, and commission employees in
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the performance of their duties;
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(3) to adopt rules and policies consistent with the Constitution and laws of the state, to
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govern county boards and officers in the performance of any duty relating to assessment,
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equalization, and collection of taxes;
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(4) to prescribe the use of forms relating to the assessment of property for state or local
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taxation, the equalization of those assessments, the reporting of property or income for state or
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local taxation purposes, or for the computation of those taxes and the reporting of any
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information, statistics, or data required by the commission;
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(5) to administer and supervise the tax laws of the state;
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(6) to prepare and maintain from year to year a complete record of all lands subject to
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taxation in this state, and all machinery used in mining and all property or surface
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improvements upon or appurtenant to mines or mining claims;
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(7) to exercise general supervision over assessors and county boards of equalization
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including the authority to enforce Section
59-2-303.1
, and over other county officers in the
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performance of their duties relating to the assessment of property and collection of taxes, so
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that all assessments of property are just and equal, according to fair market value, and that the
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tax burden is distributed without favor or discrimination;
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(8) to reconvene any county board of equalization which, when reconvened, may only
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address business approved by the commission and extend the time for which any county board
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of equalization may sit for the equalization of assessments;
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(9) to confer with, advise, and direct county treasurers, assessors, and other county
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officers in matters relating to the assessment and equalization of property for taxation and the
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collection of taxes;
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(10) to provide for and hold annually at such time and place as may be convenient a
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district or state convention of county assessors, auditors, and other county officers to consider
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and discuss matters relative to taxation, uniformity of valuation, and changes in the law relative
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to taxation and methods of assessment, to which county assessors and other officers called to
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attend shall attend at county expense;
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(11) to direct proceedings, actions, and prosecutions to enforce the laws relating to the
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penalties, liabilities, and punishments of public officers, persons, and officers or agents of
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corporations for failure or neglect to comply with the statutes governing the reporting,
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assessment, and taxation of property;
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(12) to cause complaints to be made in the proper court seeking removal from office of
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assessors, auditors, members of county boards, and other assessing, taxing, or disbursing
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officers, who are guilty of official misconduct or neglect of duty;
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(13) to require county attorneys to immediately institute and prosecute actions and
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proceedings in respect to penalties, forfeitures, removals, and punishments for violations of the
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laws relating to the assessment and taxation of property in their respective counties;
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(14) to require any person to furnish any information required by the commission to
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ascertain the value and the relative burden borne by all kinds of property in the state, and to
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require from all state and local officers any information necessary for the proper discharge of
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the duties of the commission;
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(15) to examine all records relating to the valuation of property of any person;
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(16) to subpoena witnesses to appear and give testimony and produce records relating
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to any matter before the commission;
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(17) to cause depositions of witnesses to be taken as in civil actions at the request of
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the commission or any party to any matter or proceeding before the commission;
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(18) to authorize any member or employee of the commission to administer oaths and
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affirmations in any matter or proceeding relating to the exercise of the powers and duties of the
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commission;
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(19) to visit periodically each county of the state, to investigate and direct the work and
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methods of local assessors and other officials in the assessment, equalization, and taxation of
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property, and to ascertain whether the law requiring the assessment of all property not exempt
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from taxation, and the collection of taxes, have been properly administered and enforced;
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(20) to carefully examine all cases where evasion or violation of the laws for
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assessment and taxation of property is alleged, to ascertain whether existing laws are defective
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or improperly administered;
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(21) to furnish to the governor from time to time such assistance and information as the
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governor requires;
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(22) to transmit to the governor and to each member of the Legislature
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recommendations as to legislation which will correct or eliminate defects in the operation of
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the tax laws and will equalize the burden of taxation within the state;
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(23) to correct any error in any assessment made by it at any time before the tax is due
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and report the correction to the county auditor, who shall enter the corrected assessment upon
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the assessment roll;
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(24) to compile and publish statistics relating to taxation in the state and prepare and
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submit an annual budget to the governor for inclusion in the state budget to be submitted to the
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Legislature;
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(25) to perform any further duties imposed by law, and exercise all powers necessary in
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the performance of its duties;
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(26) to adopt a schedule of fees assessed for services provided by the commission,
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unless otherwise provided by statute. The fee shall be reasonable and fair, and shall reflect the
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cost of services provided. Each fee established in this manner shall be submitted to and
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approved by the Legislature as part of the commission's annual appropriations request. The
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commission may not charge or collect any fee proposed in this manner without approval by the
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Legislature; [and]
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(27) to comply with the procedures and requirements of Title 63, Chapter 46b,
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Administrative Procedures Act, in its adjudicative proceedings[.]; and
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(28) to provide data to the executive director of the Department of Health for purposes
311
of the distributions required by Section
26-9-4
.
312
Section 3.
Section
59-1-901
is amended to read:
313
59-1-901. Creation -- Members -- Terms.
314
(1) There is created a state commission to be known as the Utah Tax Review
315
Commission.
316
(2) (a) The [review commission] Utah Tax Review Commission shall be composed of
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[14] 16 members as follows:
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(i) [Two] two members shall be appointed by the speaker of the House of
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Representatives from the House of Representatives, not more than one of whom may be from
320
the same political party[.];
321
(ii) [Two] two members shall be appointed by the president of the Senate from the
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Senate, not more than one of whom may be from the same political party[.];
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(iii) [Five] five members shall be appointed by the governor, not more than three of
324
whom may be from the same political party[.];
325
(iv) [A] one member who is a member of the State Tax Commission, appointed by the
326
State Tax Commission, shall be an ex officio member of the [review commission.] Utah Tax
327
Review Commission;
328
(v) one member who is the House of Representatives chair of the Revenue and
329
Taxation Interim Committee shall be an ex officio member of the Utah Tax Review
330
Commission; and
331
(vi) one member who is the Senate chair of the Revenue and Taxation Interim
332
Committee shall be an ex officio member of the Utah Tax Review Commission.
333
(b) The [ten] 12 members appointed under Subsection (2)(a) shall then select four
334
additional members with consideration to be given to achieving ethnic, cultural, and gender
335
diversity, representation from the major geographical areas of the state, and equal bipartisan
336
representation.
337
(3) (a) Except for members appointed under Subsections (2)(a)(i) [and], (ii), (v), and
338
(vi), and except as required by Subsection (3)(b), members shall be appointed to four-year
339
terms.
340
(b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
341
time of appointment or reappointment, adjust the length of terms to ensure that the terms of
342
commission members are staggered so that approximately half of the commission is appointed
343
every two years.
344
Section 4.
Section
59-7-612
is amended to read:
345
59-7-612. Tax credits for research activities conducted in the state -- Carry
346
forward -- Commission to report modification or repeal of certain federal provisions --
347
Utah Tax Review Commission study.
348
(1) (a) [For taxable years beginning on or after January 1, 1999, but beginning before
349
December 31, 2010, a] A taxpayer meeting the requirements of this section [shall qualify for]
350
may claim the following nonrefundable tax credits [for increasing research activities in this
351
state]:
352
(i) a research tax credit of [6%] 7% of the taxpayer's qualified research expenses for
353
the current taxable year that exceed the base amount provided for under Subsection (4); [and]
354
(ii) a tax credit for payments to qualified organizations for basic research as provided
355
in Section 41(e), Internal Revenue Code, of [6%] 7% for the current taxable year that exceed
356
the base amount provided for under Subsection (4)[.]; and
357
(iii) a tax credit equal to 5% of the taxpayer's qualified research expenses for the
358
current taxable year.
359
[(b) If a taxpayer qualifying for a credit under Subsection (1)(a) seeks to claim the
360
credit, the taxpayer shall:]
361
(b) (i) Except as provided in Subsection (1)(b)(ii), a taxpayer may:
362
[(i)] (A) claim the tax credit or a portion of the tax credit for the taxable year
363
immediately following the taxable year for which the taxpayer qualifies for the tax credit;
364
[(ii)] (B) carry forward the tax credit or a portion of the tax credit [forward] as
365
provided in Subsection [(4)(f)] (5); or
366
[(iii)] (C) claim a portion of the tax credit and carry forward a portion of the tax credit
367
as provided in Subsections (1)(b)(i)(A) and [(ii)] (B).
368
(ii) A taxpayer may not carry forward the tax credit allowed by Subsection (1)(a)(iii).
369
(c) The tax credits provided for in this section do not include the alternative
370
incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
371
(2) For purposes of claiming a tax credit under this section, a unitary group as defined
372
in Section
59-7-101
is considered to be one taxpayer.
373
(3) Except as specifically provided for in this section:
374
(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
375
Section 41, Internal Revenue Code; and
376
(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
377
the tax credits authorized under Subsection (1).
378
(4) For purposes of this section:
379
(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
380
Internal Revenue Code, except that:
381
(i) the base amount does not include the calculation of the alternative incremental
382
credit provided for in Section 41(c)(4), Internal Revenue Code;
383
(ii) a taxpayer's gross receipts include only those gross receipts attributable to sources
384
within this state as provided in Part 3, Allocation and Apportionment of Income -- Utah
385
UDITPA Provisions; and
386
(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
387
the base amount, a taxpayer:
388
(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
389
regardless of whether the taxpayer meets the requirements of Section 41(c)(3)(B)(i)(I) or (II);
390
and
391
(B) may not revoke an election to be treated as a start-up company under Subsection
392
(4)(a)(iii)(A);
393
(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
394
that the term includes only basic research conducted in this state;
395
(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
396
that the term includes only qualified research conducted in this state;
397
(d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
398
Revenue Code, except that the term includes only [those expenses incurred in conducting
399
qualified research in this state;]:
400
(i) in-house research expenses incurred in this state; and
401
(ii) contract research expenses incurred in this state; and
402
(e) [notwithstanding the provisions of Section 41(h), Internal Revenue Code, the
403
credits] a tax credit provided for in this section [shall] is not [terminate] terminated if [the
404
credits terminate] a credit terminates under Section 41, Internal Revenue Code[; and].
405
[(f) notwithstanding the provisions of Sections 39 and 41(g), Internal Revenue Code,
406
governing the carry forward and carry back of federal tax credits, if]
407
(5) If the amount of a tax credit claimed by a taxpayer under [this section] Subsection
408
(1)(a)(i) or (ii) exceeds the taxpayer's tax liability under this chapter for a taxable year, the
409
amount of the tax credit exceeding the tax liability:
410
[(i)] (a) may be carried forward for a period that does not exceed the next 14 taxable
411
years; and
412
[(ii)] (b) may not be carried back to a taxable year preceding the current taxable year.
413
[(5)] (6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
414
Act, the commission may make rules for purposes of this section prescribing a certification
415
process for qualified organizations to ensure that amounts paid to the qualified organizations
416
are for basic research conducted in this state.
417
[(6)] (7) If a [federal tax credit under] provision of Section 41, Internal Revenue Code,
418
is modified or repealed, the commission shall report the modification or repeal to the Utah Tax
419
Review Commission within 60 days after the day on which the modification or repeal becomes
420
effective.
421
[(7)] (8) (a) [Except as provided in Subsection (7)(b), the] The Utah Tax Review
422
Commission shall review the tax credits provided for in this section on or before [the earlier of:
423
(i)] October 1 of the year after the year in which the commission reports under Subsection [(6)]
424
(7) a modification or repeal of a [federal tax credit under] provision of Section 41, Internal
425
Revenue Code[; or (ii) October 1, 2004].
426
(b) Notwithstanding Subsection [(7)] (8)(a), the Utah Tax Review Commission is not
427
required to review the tax credits provided for in this section if the only modification to a
428
[federal tax credit under] provision of Section 41, Internal Revenue Code, is the extension of
429
the termination date provided for in Section 41(h), Internal Revenue Code.
430
(c) The Utah Tax Review Commission shall address in a review under this section
431
[the]:
432
(i) the cost of the [credit] tax credits provided for in this section;
433
(ii) the purpose and effectiveness of the [credit] tax credits provided for in this section;
434
(iii) whether the [credit benefits] tax credits provided for in this section benefit the
435
state; and
436
(iv) whether the [credit] tax credits provided for in this section should be:
437
(A) continued;
438
(B) modified; or
439
(C) repealed.
440
(d) If the Utah Tax Review Commission reviews the tax credits provided for in this
441
section, the Utah Tax Review Commission shall report its findings to the Revenue and
442
Taxation Interim Committee on or before the November interim meeting of the year in which
443
the Utah Tax Review Commission reviews the tax credits.
444
Section 5.
Section
59-7-614
is repealed and reenacted to read:
445
59-7-614. Renewable energy systems tax credit -- Definitions -- Limitations --
446
State tax credit in addition to allowable federal credits -- Certification -- Rulemaking
447
authority.
448
(1) As used in this section:
449
(a) "Active solar system":
450
(i) means a system of equipment capable of collecting and converting incident solar
451
radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
452
by a separate apparatus to storage or to the point of use; and
453
(ii) includes water heating, space heating or cooling, and electrical or mechanical
454
energy generation.
455
(b) "Biomass system" means any system of apparatus and equipment for use in
456
converting material into biomass energy, as defined in Section
59-12-102
, and transporting that
457
energy by separate apparatus to the point of use or storage.
458
(c) "Business entity" means any sole proprietorship, estate, trust, partnership,
459
association, corporation, cooperative, or other entity under which business is conducted or
460
transacted.
461
(d) "Commercial energy system" means any active solar, passive solar, geothermal
462
electricity, direct-use geothermal, geothermal heat-pump system, wind, hydroenergy, or
463
biomass system used to supply energy to a commercial unit or as a commercial enterprise.
464
(e) "Commercial enterprise" means a business entity whose purpose is to produce
465
electrical, mechanical, or thermal energy for sale from a commercial energy system.
466
(f) (i) "Commercial unit" means any building or structure that a business entity uses to
467
transact its business.
468
(ii) Notwithstanding Subsection (1)(f)(i):
469
(A) in the case of an active solar system used for agricultural water pumping or a wind
470
system, each individual energy generating device shall be a commercial unit; and
471
(B) if an energy system is the building or structure that a business entity uses to
472
transact its business, a commercial unit is the complete energy system itself.
473
(g) "Direct-use geothermal system" means a system of apparatus and equipment
474
enabling the direct use of thermal energy, generally between 100 and 300 degrees Fahrenheit,
475
that is contained in the earth to meet energy needs, including heating a building, an industrial
476
process, and aquaculture.
477
(h) "Geothermal electricity" means energy contained in heat that continuously flows
478
outward from the earth that is used as a sole source of energy to produce electricity.
479
(i) "Geothermal heat-pump system" means a system of apparatus and equipment
480
enabling the use of thermal properties contained in the earth at temperatures well below 100
481
degrees Fahrenheit to help meet heating and cooling needs of a structure.
482
(j) "Hydroenergy system" means a system of apparatus and equipment capable of
483
intercepting and converting kinetic water energy into electrical or mechanical energy and
484
transferring this form of energy by separate apparatus to the point of use or storage.
485
(k) "Individual taxpayer" means any person who is a taxpayer as defined in Section
486
59-10-103
and an individual as defined in Section
59-10-103
.
487
(l) "Passive solar system":
488
(i) means a direct thermal system that utilizes the structure of a building and its
489
operable components to provide for collection, storage, and distribution of heating or cooling
490
during the appropriate times of the year by utilizing the climate resources available at the site;
491
and
492
(ii) includes those portions and components of a building that are expressly designed
493
and required for the collection, storage, and distribution of solar energy.
494
(m) "Residential energy system" means any active solar, passive solar, biomass,
495
direct-use geothermal, geothermal heat-pump system, wind, or hydroenergy system used to
496
supply energy to or for any residential unit.
497
(n) "Residential unit" means any house, condominium, apartment, or similar dwelling
498
unit that serves as a dwelling for a person, group of persons, or a family but does not include
499
property subject to a fee under:
500
(i) Section
59-2-404
;
501
(ii) Section
59-2-405
;
502
(iii) Section
59-2-405.1
;
503
(iv) Section
59-2-405.2
; or
504
(v) Section
59-2-405.3
.
505
(o) "Utah Geological Survey" means the Utah Geological Survey established in Section
506
63-73-5
.
507
(p) "Wind system" means a system of apparatus and equipment capable of intercepting
508
and converting wind energy into mechanical or electrical energy and transferring these forms of
509
energy by a separate apparatus to the point of use, sale, or storage.
510
(2) (a) (i) For taxable years beginning on or after January 1, 2007, a business entity that
511
purchases and completes or participates in the financing of a residential energy system to
512
supply all or part of the energy required for a residential unit owned or used by the business
513
entity and situated in Utah is entitled to a nonrefundable tax credit as provided in this
514
Subsection (2)(a).
515
(ii) (A) A business entity is entitled to a tax credit equal to 25% of the reasonable costs
516
of each residential energy system installed with respect to each residential unit it owns or uses,
517
including installation costs, against any tax due under this chapter for the taxable year in which
518
the energy system is completed and placed in service.
519
(B) The total amount of each credit under this Subsection (2)(a) may not exceed $2,000
520
per residential unit.
521
(C) The credit under this Subsection (2)(a) is allowed for any residential energy system
522
completed and placed in service on or after January 1, 2007.
523
(iii) If a business entity sells a residential unit to an individual taxpayer before making
524
a claim for the tax credit under this Subsection (2)(a), the business entity may:
525
(A) assign its right to this tax credit to the individual taxpayer; and
526
(B) if the business entity assigns its right to the tax credit to an individual taxpayer
527
under Subsection (2)(a)(iii)(A), the individual taxpayer may claim the tax credit as if the
528
individual taxpayer had completed or participated in the costs of the residential energy system
529
under Section
59-10-1014
.
530
(b) (i) For taxable years beginning on or after January 1, 2007, a business entity that
531
purchases or participates in the financing of a commercial energy system situated in Utah is
532
entitled to a refundable tax credit as provided in this Subsection (2)(b) if the commercial
533
energy system does not use wind, geothermal electricity, or biomass equipment capable of
534
producing a total of 660 or more kilowatts of electricity, and:
535
(A) the commercial energy system supplies all or part of the energy required by
536
commercial units owned or used by the business entity; or
537
(B) the business entity sells all or part of the energy produced by the commercial
538
energy system as a commercial enterprise.
539
(ii) (A) A business entity is entitled to a tax credit of up to 10% of the reasonable costs
540
of any commercial energy system installed, including installation costs, against any tax due
541
under this chapter for the taxable year in which the commercial energy system is completed and
542
placed in service.
543
(B) Notwithstanding Subsection (2)(b)(ii)(A), the total amount of the credit under this
544
Subsection (2)(b) may not exceed $50,000 per commercial unit.
545
(C) The credit under this Subsection (2)(b) is allowed for any commercial energy
546
system completed and placed in service on or after January 1, 2007.
547
(iii) A business entity that leases a commercial energy system installed on a
548
commercial unit is eligible for the tax credit under this Subsection (2)(b) if the lessee can
549
confirm that the lessor irrevocably elects not to claim the credit.
550
(iv) Only the principal recovery portion of the lease payments, which is the cost
551
incurred by a business entity in acquiring a commercial energy system, excluding interest
552
charges and maintenance expenses, is eligible for the tax credit under this Subsection (2)(b).
553
(v) A business entity that leases a commercial energy system is eligible to use the tax
554
credit under this Subsection (2)(b) for a period no greater than seven years from the initiation
555
of the lease.
556
(vi) A tax credit allowed by this Subsection (2)(b) may not be carried forward or
557
carried back.
558
(c) (i) For taxable years beginning on or after January 1, 2007, a business entity that
559
owns a commercial energy system situated in Utah using wind, geothermal electricity, or
560
biomass equipment capable of producing a total of 660 or more kilowatts of electricity is
561
entitled to a refundable tax credit as provided in this Subsection (2)(c) if:
562
(A) the commercial energy system supplies all or part of the energy required by
563
commercial units owned or used by the business entity; or
564
(B) the business entity sells all or part of the energy produced by the commercial
565
energy system as a commercial enterprise.
566
(ii) (A) A business entity is entitled to a tax credit under this section equal to the
567
product of:
568
(I) 0.35 cents; and
569
(II) the kilowatt hours of electricity produced and either used or sold during the taxable
570
year.
571
(B) (I) The credit calculated under Subsection (2)(c)(ii)(A) may be claimed for
572
production occurring during a period of 48 months beginning with the month in which the
573
commercial energy system is placed in commercial service.
574
(II) The credit allowed by this Subsection (2)(c) for each year may not be carried
575
forward or carried back.
576
(C) The credit under this Subsection (2)(c) is allowed for any commercial energy
577
system completed and placed in service on or after January 1, 2007.
578
(iii) A business entity that leases a commercial energy system installed on a
579
commercial unit is eligible for the tax credit under this Subsection (2)(c) if the lessee can
580
confirm that the lessor irrevocably elects not to claim the credit.
581
(d) (i) A tax credit under Subsection (2)(a) or (b) may be claimed for the taxable year
582
in which the energy system is completed and placed in service.
583
(ii) Additional energy systems or parts of energy systems may be claimed for
584
subsequent years.
585
(iii) If the amount of a tax credit under Subsection (2)(a) exceeds a business entity's tax
586
liability under this chapter for a taxable year, the amount of the credit exceeding the liability
587
may be carried forward for a period which does not exceed the next four taxable years.
588
(3) (a) The tax credits provided for under Subsection (2) are in addition to any tax
589
credits provided under the laws or rules and regulations of the United States.
590
(b) (i) The Utah Geological Survey may set standards for residential and commercial
591
energy systems claiming a credit under Subsections (2)(a) and (b) that cover the safety,
592
reliability, efficiency, leasing, and technical feasibility of the systems to ensure that the systems
593
eligible for the tax credit use the state's renewable and nonrenewable energy resources in an
594
appropriate and economic manner.
595
(ii) The Utah Geological Survey may set standards for residential and commercial
596
energy systems that establish the reasonable costs of an energy system, as used in Subsections
597
(2)(a)(ii)(A) and (2)(b)(ii)(A), as an amount per unit of energy production.
598
(iii) A tax credit may not be taken under Subsection (2) until the Utah Geological
599
Survey has certified that the energy system has been completely installed and is a viable system
600
for saving or production of energy from renewable resources.
601
(c) The Utah Geological Survey and the commission may make rules in accordance
602
with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, that are necessary to
603
implement this section.
604
(4) (a) On or before October 1, 2012, and every five years thereafter, the Utah Tax
605
Review Commission shall review each tax credit provided by this section and make
606
recommendations to the Revenue and Taxation Interim Committee concerning whether the
607
credit should be continued, modified, or repealed.
608
(b) The Utah Tax Review Commission's report under Subsection (4)(a) shall include
609
information concerning the cost of the credit, the purpose and effectiveness of the credit, and
610
the state's benefit from the credit.
611
Section 6.
Section
59-10-104
is amended to read:
612
59-10-104. Tax basis -- Rates -- Adjustment for changes in the consumer price
613
index -- Exemption.
614
(1) Except as provided in Subsection (5) or Part 12, Single Rate Individual Income Tax
615
Act, for taxable years beginning on or after January 1, 2006, but beginning on or before
616
December 31, 2007, a tax is imposed on the state taxable income of every resident individual
617
as provided in this section.
618
(2) For an individual, other than a husband and wife or head of household required to
619
use the tax table under Subsection (3), the tax under this section is imposed in accordance with
620
the following income brackets:
621
If the state taxable income is: The tax is:
622
Less than or equal to $1,000 2.3% of the state taxable income
623
Greater than $1,000 but less than $23, plus 3.3% of state taxable
624
or equal to $2,000 income greater than $1,000
625
Greater than $2,000 but less than $56, plus 4.2% of state taxable
626
or equal to $3,000 income greater than $2,000
627
Greater than $3,000 but less than $98, plus 5.2% of state taxable
628
or equal to $4,000 income greater than $3,000
629
Greater than $4,000 but less than $150, plus 6% of state taxable
630
or equal to $5,500 income greater than $4,000
631
Greater than $5,500 $240, plus 6.98% of state taxable
632
income greater than $5,500
633
(3) For a husband and wife filing a single return jointly, or a head of household as
634
defined in Section 2(b), Internal Revenue Code, filing a single return, the tax under this section
635
is imposed in accordance with the following income brackets:
636
If the state taxable income is: The tax is:
637
Less than or equal to $2,000 2.3% of the state taxable income
638
Greater than $2,000 but less than $46, plus 3.3% of state taxable
639
or equal to $4,000 income greater than $2,000
640
Greater than $4,000 but less than $112, plus 4.2% of state taxable
641
or equal to $6,000 income greater than $4,000
642
Greater than $6,000 but less than $196, plus 5.2% of state taxable
643
or equal to $8,000 income greater than $6,000
644
Greater than $8,000 but less than $300, plus 6% of state taxable
645
or equal to $11,000 income greater than $8,000
646
Greater than $11,000 $480, plus 6.98% of state taxable
647
income greater than $11,000
648
(4) (a) For taxable years beginning on or after January 1, 2009, the commission shall:
649
(i) make the following adjustments to the income brackets under Subsection (2):
650
(A) increase or decrease the income brackets under Subsection (2) by a percentage
651
equal to the percentage difference between the consumer price index for the preceding calendar
652
year and the consumer price index for the calendar year 2007; and
653
(B) after making an increase or decrease under Subsection (4)(a)(i)(A), round the
654
income brackets under Subsection (2) to the nearest whole dollar;
655
(ii) after making the adjustments described in Subsection (4)(a)(i) to the income
656
brackets under Subsection (2), adjust the income brackets under Subsection (3) so that for each
657
income bracket under Subsection (2) there is a corresponding income bracket under Subsection
658
(3) that is equal to the product of:
659
(A) each income bracket under Subsection (2); and
660
(B) two; and
661
(iii) to the extent necessary to reflect an adjustment under Subsection (4)(a)(i) or (ii):
662
(A) increase or decrease the amount of tax under Subsection (2) or (3) prior to adding
663
in the portion of the tax calculated as a percentage of state taxable income; and
664
(B) after making an increase or decrease under Subsection (4)(a)(iii)(A), round the
665
amount of tax under Subsection (2) or (3) to the nearest whole dollar.
666
(b) The commission may not increase or decrease the tax rate percentages provided in
667
Subsection (2) or (3).
668
(c) For purposes of Subsection (4)(a)(i), the commission shall calculate the consumer
669
price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
670
(5) This section does not apply to a resident individual exempt from taxation under
671
Section
59-10-104.1
.
672
Section 7.
Section
59-10-1012
is amended to read:
673
59-10-1012. Tax credits for research activities conducted in the state -- Carry
674
forward -- Commission to report modification or repeal of certain federal provisions --
675
Utah Tax Review Commission study.
676
(1) (a) [For taxable years beginning on or after January 1, 1999, but beginning before
677
December 31, 2010, a] A claimant, estate, or trust meeting the requirements of this section
678
[shall qualify for] may claim the following nonrefundable tax credits [for increasing research
679
activities in this state]:
680
(i) a research tax credit of [6%] 7% of the claimant's, estate's, or trust's qualified
681
research expenses for the current taxable year that exceed the base amount provided for under
682
Subsection [(4)] (3); [and]
683
(ii) a tax credit for payments to qualified organizations for basic research as provided
684
in Section 41(e), Internal Revenue Code of [6%] 7% for the current taxable year that exceed
685
the base amount provided for under Subsection [(4).] (3); and
686
(iii) a tax credit equal to 5% of the claimant's, estate's, or trust's qualified research
687
expenses for the current taxable year.
688
(b) (i) [If a claimant, estate, or trust qualifying for a tax credit under Subsection (1)(a)
689
seeks to claim the tax credit, the] Except as provided in Subsection (1)(b)(ii), a claimant, estate,
690
or trust [shall] may:
691
[(i)] (A) claim the tax credit or a portion of the tax credit for the taxable year
692
immediately following the taxable year for which the claimant, estate, or trust qualifies for the
693
tax credit;
694
[(ii)] (B) carry forward the tax credit or a portion of the tax credit [forward] as
695
provided in Subsection (4)[(f)]; or
696
[(iii)] (C) claim a portion of the tax credit and carry forward a portion of the tax credit
697
as provided in Subsections (1)(b)(i)(A) and [(ii)] (B).
698
(ii) A claimant, estate, or trust may not carry forward the tax credit allowed by
699
Subsection (1)(a)(iii).
700
(c) The tax credits provided for in this section do not include the alternative
701
incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
702
[(2) For purposes of claiming a tax credit under this section, a unitary group as defined
703
in Section
59-7-101
is considered to be one claimant.]
704
[(3)] (2) Except as specifically provided for in this section:
705
(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
706
Section 41, Internal Revenue Code; and
707
(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
708
the tax credits authorized under Subsection (1).
709
[(4)] (3) For purposes of this section:
710
(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
711
Internal Revenue Code, except that:
712
(i) the base amount does not include the calculation of the alternative incremental
713
credit provided for in Section 41(c)(4), Internal Revenue Code;
714
(ii) a claimant's, estate's, or trust's gross receipts include only those gross receipts
715
attributable to sources within this state as provided in Section
59-10-118
; and
716
(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
717
the base amount, a claimant, estate, or trust:
718
(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
719
regardless of whether the claimant, estate, or trust meets the requirements of Section
720
41(c)(3)(B)(i)(I) or (II); and
721
(B) may not revoke an election to be treated as a start-up company under Subsection
722
[(4)] (3)(a)(iii)(A);
723
(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
724
that the term includes only basic research conducted in this state;
725
(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
726
that the term includes only qualified research conducted in this state;
727
(d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
728
Revenue Code, except that the term includes only [those expenses incurred in conducting
729
qualified research in this state;]:
730
(i) in-house research expenses incurred in this state; and
731
(ii) contract research expenses incurred in this state; and
732
(e) [notwithstanding the provisions of Section 41(h), Internal Revenue Code, the tax
733
credits] a tax credit provided for in this section [shall] is not [terminate] terminated if [the
734
credits terminate] a credit terminates under Section 41, Internal Revenue Code[; and].
735
[(f) notwithstanding the provisions of Sections 39 and 41(g), Internal Revenue Code,
736
governing the carry forward and carry back of federal tax credits, if]
737
(4) If the amount of a tax credit claimed by a claimant, estate, or trust under [this
738
section] Subsection (1)(a)(i) or (ii) exceeds the claimant's, estate's, or trust's tax liability under
739
this chapter for a taxable year, the amount of the tax credit exceeding the tax liability:
740
[(i)] (a) may be carried forward for a period that does not exceed the next 14 taxable
741
years; and
742
[(ii)] (b) may not be carried back to a taxable year preceding the current taxable year.
743
(5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
744
commission may make rules for purposes of this section prescribing a certification process for
745
qualified organizations to ensure that amounts paid to the qualified organizations are for basic
746
research conducted in this state.
747
(6) If a [federal credit under] provision of Section 41, Internal Revenue Code, is
748
modified or repealed, the commission shall report the modification or repeal to the Utah Tax
749
Review Commission within 60 days after the day on which the modification or repeal becomes
750
effective.
751
(7) (a) The Utah Tax Review Commission shall review the tax credits provided for in
752
this section on or before October 1 of the year after the year in which the commission reports
753
under Subsection (6) a modification or repeal of a provision of Section 41, Internal Revenue
754
Code.
755
(b) Notwithstanding Subsection (7)(a), the Utah Tax Review Commission is not
756
required to review the tax credits provided for in this section if the only modification to a
757
provision of Section 41, Internal Revenue Code, is the extension of the termination date
758
provided for in Section 41(h), Internal Revenue Code.
759
(c) The Utah Tax Review Commission shall address in a review under this section:
760
(i) the cost of the tax credits provided for in this section;
761
(ii) the purpose and effectiveness of the tax credits provided for in this section;
762
(iii) whether the tax credits provided for in this section benefit the state; and
763
(iv) whether the tax credits provided for in this section should be:
764
(A) continued;
765
(B) modified; or
766
(C) repealed.
767
(d) If the Utah Tax Review Commission reviews the tax credits provided for in this
768
section, the Utah Tax Review Commission shall report its findings to the Revenue and
769
Taxation Interim Committee on or before the November interim meeting of the year in which
770
the Utah Tax Review Commission reviews the tax credits.
771
Section 8.
Section
59-10-1014
is amended to read:
772
59-10-1014. Renewable energy systems tax credit -- Definitions -- Limitations --
773
State tax credit in addition to allowable federal credits -- Certification -- Rulemaking
774
authority.
775
(1) As used in this part:
776
(a) "Active solar system":
777
(i) means a system of equipment capable of collecting and converting incident solar
778
radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
779
by a separate apparatus to storage or to the point of use; and
780
(ii) includes water heating, space heating or cooling, and electrical or mechanical
781
energy generation.
782
(b) "Biomass system" means any system of apparatus and equipment [capable of
783
converting organic plant, wood, or waste products into electrical and thermal energy and
784
transferring these forms of energy by a separate apparatus to the point of use or storage] for use
785
in converting material into biomass energy, as defined in Section
59-12-102
, and transporting
786
that energy by separate apparatus to the point of use or storage.
787
(c) "Business entity" means any entity under which business is conducted or transacted.
788
[(d) "Commercial energy system" means any active solar, passive solar, wind,
789
hydroenergy, or biomass system used to supply energy to a commercial unit or as a commercial
790
enterprise.]
791
[(e) "Commercial enterprise" means a business entity whose purpose is to produce
792
electrical, mechanical, or thermal energy for sale from a commercial energy system.]
793
[(f) (i) "Commercial unit" means any building or structure which that a business entity
794
uses to transact its business, except as provided in Subsection (1)(f)(ii); and]
795
[(ii) (A) in the case of an active solar system used for agricultural water pumping or a
796
wind system, each individual energy generating device shall be a commercial unit; and]
797
[(B) if an energy system is the building or structure which a business entity uses to
798
transact its business, a commercial unit is the complete energy system itself.]
799
(d) "Direct-use geothermal system" means a system of apparatus and equipment
800
enabling the direct use of thermal energy, generally between 100 and 300 degrees Fahrenheit,
801
that is contained in the earth to meet energy needs, including heating a building, an industrial
802
process, and aquaculture.
803
(e) "Geothermal electricity" means energy contained in heat that continuously flows
804
outward from the earth that is used as a sole source of energy to produce electricity.
805
(f) "Geothermal heat-pump system" means a system of apparatus and equipment
806
enabling the use of thermal properties contained in the earth at temperatures well below 100
807
degrees Fahrenheit to help meet heating and cooling needs of a structure.
808
(g) "Hydroenergy system" means a system of apparatus and equipment capable of
809
intercepting and converting kinetic water energy into electrical or mechanical energy and
810
transferring this form of energy by separate apparatus to the point of use or storage.
811
(h) "Passive solar system":
812
(i) means a direct thermal system [which] that utilizes the structure of a building and its
813
operable components to provide for collection, storage, and distribution of heating or cooling
814
during the appropriate times of the year by utilizing the climate resources available at the site;
815
and
816
(ii) includes those portions and components of a building that are expressly designed
817
and required for the collection, storage, and distribution of solar energy.
818
(i) "Residential energy system" means any active solar, passive solar, biomass,
819
direct-use geothermal, geothermal heat-pump system, wind, or hydroenergy system used to
820
supply energy to or for any residential unit.
821
(j) "Residential unit" means any house, condominium, apartment, or similar dwelling
822
unit [which] that serves as a dwelling for a person, group of persons, or a family but does not
823
include property subject to a fee under:
824
(i) Section
59-2-404
;
825
(ii) Section
59-2-405
;
826
(iii) Section
59-2-405.1
;
827
(iv) Section
59-2-405.2
; or
828
(v) Section
59-2-405.3
.
829
(k) "Utah Geological Survey" means the Utah Geological Survey established in Section
830
63-73-5
.
831
(l) "Wind system" means a system of apparatus and equipment capable of intercepting
832
and converting wind energy into mechanical or electrical energy and transferring these forms of
833
energy by a separate apparatus to the point of use or storage.
834
(2) For taxable years beginning on or after January 1, [2001] 2007, [but beginning on
835
or before December 31, 2006,] a claimant, estate, or trust may claim a nonrefundable tax credit
836
as provided in this section if:
837
(a) a claimant, estate, or trust that is not a business entity purchases and completes or
838
participates in the financing of a residential energy system to supply all or part of the energy for
839
the claimant's, estate's, or trust's residential unit in the state; or
840
(b) (i) a claimant, estate, or trust that is a business entity sells a residential unit to
841
another claimant, estate, or trust that is not a business entity [prior to] before making a claim
842
for a tax credit under Subsection (6) or Section
59-7-614
; and
843
(ii) the claimant, estate, or trust that is a business entity assigns its right to the tax credit
844
to the claimant, estate, or trust that is not a business entity as provided in Subsection (6)(c) or
845
Subsection
59-7-614
(2)(a)(iii).
846
(3) (a) The tax credit described in Subsection (2) is equal to 25% of the reasonable
847
costs of [the] each residential energy system, including installation costs, against any income
848
tax liability of the claimant, estate, or trust under this chapter for the taxable year in which the
849
residential energy system is completed and placed in service.
850
(b) The total amount of [the] each tax credit under this section may not exceed $2,000
851
per residential unit.
852
(c) The tax credit under this section is allowed for any residential energy system
853
completed and placed in service on or after January 1, [2001] 2007[, but on or before
854
December 31, 2006].
855
(4) (a) The tax credit provided for in this section shall be claimed in the return for the
856
taxable year in which the residential energy system is completed and placed in service.
857
(b) Additional residential energy systems or parts of residential energy systems may be
858
similarly claimed in returns for subsequent taxable years as long as the total amount claimed
859
does not exceed $2,000 per residential unit.
860
(c) If the amount of the tax credit under this section exceeds the income tax liability of
861
the claimant, estate, or trust claiming the tax credit under this section for that taxable year, then
862
the amount not used may be carried over for a period [which] that does not exceed the next
863
four taxable years.
864
(5) (a) A claimant, estate, or trust that is not a business entity that leases a residential
865
energy system installed on a residential unit is eligible for the residential energy tax [credits]
866
credit if that claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the
867
tax credit.
868
(b) Only the principal recovery portion of the lease payments, which is the cost
869
incurred by the claimant, estate, or trust in acquiring the residential energy system excluding
870
interest charges and maintenance expenses, is eligible for the tax credits.
871
(c) A claimant, estate, or trust described in this Subsection (5) may use the tax credits
872
for a period that does not exceed seven years from the initiation of the lease.
873
(6) (a) A claimant, estate, or trust that is a business entity that purchases and completes
874
or participates in the financing of a residential energy system to supply all or part of the energy
875
required for a residential unit owned or used by the claimant, estate, or trust that is a business
876
entity and situated in Utah is entitled to a nonrefundable tax credit as provided in this
877
Subsection (6).
878
(b) (i) For taxable years beginning on or after January 1, [2001] 2007, [but beginning
879
on or before December 31, 2006,] a claimant, estate, or trust that is a business entity is entitled
880
to a nonrefundable tax credit equal to 25% of the reasonable costs of a residential energy
881
system installed with respect to each residential unit it owns or uses, including installation
882
costs, against any tax due under this chapter for the taxable year in which the energy system is
883
completed and placed in service.
884
(ii) The total amount of the tax credit under this Subsection (6) may not exceed $2,000
885
per residential unit.
886
(iii) The tax credit under this Subsection (6) is allowed for any residential energy
887
system completed and placed in service on or after January 1, [2001] 2007[, but on or before
888
December 31, 2006].
889
(c) If a claimant, estate, or trust that is a business entity sells a residential unit to a
890
claimant, estate, or trust that is not a business entity [prior to] before making a claim for the tax
891
credit under this Subsection (6), the claimant, estate, or trust that is a business entity may:
892
(i) assign its right to this tax credit to the claimant, estate, or trust that is not a business
893
entity; and
894
(ii) if the claimant, estate, or trust that is a business entity assigns its right to the tax
895
credit to a claimant, estate, or trust that is not a business entity under Subsection (6)(c)(i), the
896
claimant, estate, or trust that is not a business entity may claim the tax credit as if that claimant,
897
estate, or trust that is not a business entity had completed or participated in the costs of the
898
residential energy system under this section.
899
[(7) (a) A claimant, estate, or trust that is a business entity that purchases or
900
participates in the financing of a commercial energy system is entitled to a nonrefundable tax
901
credit as provided in this Subsection (7) if:]
902
[(i) the commercial energy system supplies all or part of the energy required by
903
commercial units owned or used by the claimant, estate, or trust that is a business entity; or]
904
[(ii) the claimant, estate, or trust that is a business entity sells all or part of the energy
905
produced by the commercial energy system as a commercial enterprise.]
906
[(b) (i) A claimant, estate, or trust that is a business entity is entitled to a tax credit
907
equal to 10% of the costs of any commercial energy system installed, including installation
908
costs, against any tax due under this chapter for the taxable year in which the commercial
909
energy system is completed and placed in service.]
910
[(ii) The total amount of the tax credit under this Subsection (7) may not exceed
911
$50,000 per commercial unit.]
912
[(iii) The tax credit under this Subsection (7) is allowed for any commercial energy
913
system completed and placed in service on or after January 1, 2001 , but on or before
914
December 31, 2006 .]
915
[(c) A claimant, estate, or trust that is a business entity that leases a commercial energy
916
system installed on a commercial unit is eligible for the tax credit under this Subsection (7) if
917
the claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the tax
918
credit.]
919
[(d) Only the principal recovery portion of the lease payments, which is the cost
920
incurred by a claimant, estate, or trust that is not a business entity in acquiring a commercial
921
energy system, excluding interest charges and maintenance expenses, is eligible for the tax
922
credit under this Subsection (7).]
923
[(e) A claimant, estate, or trust that is a business entity that leases a commercial energy
924
system is eligible to use the tax credit under this Subsection (7) for a period that does not
925
exceed seven years from the initiation of the lease.]
926
[(8)] (7) (a) A tax credit under this section may be claimed for the taxable year in
927
which the residential energy system is completed and placed in service.
928
(b) Additional residential energy systems or parts of residential energy systems may be
929
claimed for subsequent years.
930
(c) If the amount of a tax credit under this section exceeds the tax liability of the
931
claimant, estate, or trust claiming the tax credit under this section for a taxable year, the amount
932
of the tax credit exceeding the tax liability may be carried over for a period which does not
933
exceed the next four taxable years.
934
[(9)] (8) The tax credits provided for under this section are in addition to any tax
935
credits provided under the laws or rules and regulations of the United States.
936
[(10)] (9) (a) The Utah Geological Survey may set standards for residential [and
937
commercial] energy systems that cover the safety, reliability, efficiency, leasing, and technical
938
feasibility of the systems to ensure that the systems eligible for the tax credit use the state's
939
renewable and nonrenewable energy resources in an appropriate and economic manner.
940
(b) The Utah Geological Survey may set standards for residential and commercial
941
energy systems that establish the reasonable costs of an energy system, as used in Subsections
942
(3)(a) and (6)(b)(i), as an amount per unit of energy production.
943
[(b)] (c) A tax credit may not be taken under this section until the Utah Geological
944
Survey has certified that the energy system has been completely installed and is a viable system
945
for saving or production of energy from renewable resources.
946
[(11)] (10) The Utah Geological Survey and the commission [are authorized to
947
promulgate] may make rules in accordance with Title 63, Chapter 46a, Utah Administrative
948
Rulemaking Act, [which] that are necessary to implement this section.
949
[(12) The Uniform School Fund shall be reimbursed by transfers from the General
950
Fund for any tax credits taken under this section.]
951
(11) (a) On or before October 1, 2012, and every five years thereafter, the Utah Tax
952
Review Commission shall review each tax credit provided by this section and make
953
recommendations to the Revenue and Taxation Interim Committee concerning whether the
954
credit should be continued, modified, or repealed.
955
(b) The Utah Tax Review Commission's report under Subsection (11)(a) shall include
956
information concerning the cost of the credit, the purpose and effectiveness of the credit, and
957
the state's benefit from the credit.
958
Section 9.
Section
59-10-1106
is enacted to read:
959
59-10-1106. Renewable energy tax credit.
960
(1) As used in this section:
961
(a) "Active solar system" is as defined in Section
59-10-1014
.
962
(b) "Biomass system" is as defined in Section
59-10-1014
.
963
(c) "Business entity" is as defined in Section
59-10-1014
.
964
(d) "Commercial energy system" means any active solar, passive solar, geothermal
965
electricity, direct-use geothermal, geothermal heat-pump system, wind, hydroenergy, or
966
biomass system used to supply energy to a commercial unit or as a commercial enterprise.
967
(e) "Commercial enterprise" means a business entity whose purpose is to produce
968
electrical, mechanical, or thermal energy for sale from a commercial energy system.
969
(f) (i) "Commercial unit" means any building or structure that a business entity uses to
970
transact its business.
971
(ii) Notwithstanding Subsection (1)(f)(i):
972
(A) in the case of an active solar system used for agricultural water pumping or a wind
973
system, each individual energy generating device shall be a commercial unit; and
974
(B) if an energy system is the building or structure that a business entity uses to
975
transact its business, a commercial unit is the complete energy system itself.
976
(g) "Direct-use geothermal system" is as defined in Section
59-10-1014
.
977
(h) "Geothermal electricity" is as defined in Section
59-10-1014
.
978
(i) "Geothermal heat-pump system" is as defined in Section
59-10-1014
.
979
(j) "Hydroenergy system" is as defined in Section
59-10-1014
.
980
(k) "Individual taxpayer" means any person who is a taxpayer as defined in Section
981
59-10-103
and an individual as defined in Section
59-10-103
.
982
(l) "Passive solar system" is as defined in Section
59-10-1014
.
983
(m) "Utah Geological Survey" means the Utah Geological Survey established in
984
Section
63-73-5
.
985
(n) "Wind system" is as defined in Section
59-10-1014
.
986
(2) (a) (i) For taxable years beginning on or after January 1, 2007, a business entity that
987
purchases or participates in the financing of a commercial energy system situated in Utah is
988
entitled to a refundable tax credit as provided in this Subsection (2)(a) if the commercial energy
989
system does not use wind, geothermal electricity, or biomass equipment capable of producing a
990
total of 660 or more kilowatts of electricity and:
991
(A) the commercial energy system supplies all or part of the energy required by
992
commercial units owned or used by the business entity; or
993
(B) the business entity sells all or part of the energy produced by the commercial
994
energy system as a commercial enterprise.
995
(ii) (A) A business entity is entitled to a tax credit of up to 10% of the reasonable costs
996
of any commercial energy system installed, including installation costs, against any tax due
997
under this chapter for the taxable year in which the commercial energy system is completed and
998
placed in service.
999
(B) Notwithstanding Subsection (2)(a)(ii)(A), the total amount of the credit under this
1000
Subsection (2)(a) may not exceed $50,000 per commercial unit.
1001
(C) The credit under this Subsection (2)(a) is allowed for any commercial energy
1002
system completed and placed in service on or after January 1, 2007.
1003
(iii) A business entity that leases a commercial energy system installed on a
1004
commercial unit is eligible for the tax credit under this Subsection (2)(a) if the lessee can
1005
confirm that the lessor irrevocably elects not to claim the credit.
1006
(iv) Only the principal recovery portion of the lease payments, which is the cost
1007
incurred by a business entity in acquiring a commercial energy system, excluding interest
1008
charges and maintenance expenses, is eligible for the tax credit under this Subsection (2)(a).
1009
(v) A business entity that leases a commercial energy system is eligible to use the tax
1010
credit under this Subsection (2)(a) for a period no greater than seven years from the initiation of
1011
the lease.
1012
(b) (i) For taxable years beginning on or after January 1, 2007, a business entity that
1013
owns a commercial energy system situated in Utah using wind, geothermal electricity, or
1014
biomass equipment capable of producing a total of 660 or more kilowatts of electricity is
1015
entitled to a refundable tax credit as provided in this section if:
1016
(A) the commercial energy system supplies all or part of the energy required by
1017
commercial units owned or used by the business entity; or
1018
(B) the business entity sells all or part of the energy produced by the commercial
1019
energy system as a commercial enterprise.
1020
(ii) A business entity is entitled to a tax credit under this Subsection (2)(b) equal to the
1021
product of:
1022
(A) 0.35 cents; and
1023
(B) the kilowatt hours of electricity produced and either used or sold during the taxable
1024
year.
1025
(iii) The credit allowed by this Subsection (2)(b):
1026
(A) may be claimed for production occurring during a period of 48 months beginning
1027
with the month in which the commercial energy system is placed in service; and
1028
(B) may not be carried forward or back.
1029
(iv) A business entity that leases a commercial energy system installed on a
1030
commercial unit is eligible for the tax credit under this section if the lessee can confirm that the
1031
lessor irrevocably elects not to claim the credit.
1032
(3) The tax credits provided for under this section are in addition to any tax credits
1033
provided under the laws or rules and regulations of the United States.
1034
(4) (a) The Utah Geological Survey may set standards for commercial energy systems
1035
claiming a tax credit under Subsection (2)(a) that cover the safety, reliability, efficiency,
1036
leasing, and technical feasibility of the systems to ensure that the systems eligible for the tax
1037
credit use the state's renewable and nonrenewable energy resources in an appropriate and
1038
economic manner.
1039
(b) A tax credit may not be taken under this section until the Utah Geological Survey
1040
has certified that the commercial energy system has been completely installed and is a viable
1041
system for saving or production of energy from renewable resources.
1042
(5) The Utah Geological Survey and the commission may make rules in accordance
1043
with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, that are necessary to
1044
implement this section.
1045
(6) (a) On or before October 1, 2012, and every five years thereafter, the Utah Tax
1046
Review Commission shall review each tax credit provided by this section and make
1047
recommendations to the Revenue and Taxation Interim Committee concerning whether the
1048
credit should be continued, modified, or repealed.
1049
(b) The Utah Tax Review Commission's report under Subsection (6)(a) shall include
1050
information concerning the cost of the credit, the purpose and effectiveness of the credit, and
1051
the state's benefit from the credit.
1052
Section 10.
Section
59-10-1202
is amended to read:
1053
59-10-1202. Definitions.
1054
As used in this part:
1055
(1) "Military service" is as defined in Pub. L. No. 108-189, Sec. 101.
1056
(2) "Servicemember" is as defined in Pub. L. No. 108-189, Sec. 101.
1057
(3) "State income tax percentage for a nonresident individual" means a percentage
1058
equal to a nonresident individual's adjusted gross income for the taxable year received from
1059
Utah sources, as determined under Section
59-10-117
, divided by the difference between:
1060
(a) the nonresident individual's total adjusted gross income for that taxable year; and
1061
(b) if the nonresident individual described in Subsection (3)(a) is a servicemember, the
1062
compensation the servicemember receives for military service if the servicemember is serving
1063
in compliance with military orders.
1064
(4) "State income tax percentage for a part-year resident individual" means, for a
1065
taxable year, a fraction:
1066
(a) the numerator of which is the sum of:
1067
(i) for the time period during the taxable year that the part-year resident individual is a
1068
resident, the part-year resident individual's total adjusted gross income for that time period; and
1069
(ii) for the time period during the taxable year that the part-year resident individual is a
1070
nonresident, the part-year resident individual's adjusted gross income for that time period
1071
received from Utah sources, as determined under Section
59-10-117
; and
1072
(b) the denominator of which is the difference between:
1073
(i) the part-year resident individual's total adjusted gross income for that taxable year;
1074
and
1075
(ii) if the part-year resident individual is a servicemember, any compensation the
1076
servicemember receives for military service during the portion of the taxable year that the
1077
servicemember is a nonresident if the servicemember is serving in compliance with military
1078
orders.
1079
[(4)] (5) "State taxable income" means a resident or nonresident individual's adjusted
1080
gross income after making the:
1081
(a) additions and subtractions required by Section
59-10-1204
; and
1082
(b) adjustments required by Section
59-10-1205
.
1083
[(5)] (6) "Unapportioned state tax" means the product of the:
1084
(a) difference between:
1085
(i) a nonresident individual's state taxable income; and
1086
(ii) if the nonresident individual described in Subsection [(5)] (6)(a)(i) is a
1087
servicemember, compensation the servicemember receives for military service if the
1088
servicemember is serving in compliance with military orders; and
1089
(b) percentage listed in Subsection
59-10-1203
(2)(a)(i)(B).
1090
Section 11.
Section
59-10-1203
is amended to read:
1091
59-10-1203. Single rate tax for resident or nonresident individual -- Tax rate --
1092
Contributions -- Exemption -- Amended returns.
1093
(1) [For taxable years beginning on or after January 1, 2007, a] A resident or
1094
nonresident individual may calculate and pay a tax under this section as provided in this part.
1095
(2) (a) A resident individual that calculates and pays a tax under this section:
1096
(i) shall pay for a taxable year an amount equal to the product of:
1097
(A) the resident individual's state taxable income for that taxable year; and
1098
(B) [5.35%] 5%; and
1099
(ii) is exempt from paying the tax imposed by Section
59-10-104
.
1100
(b) A nonresident individual that calculates and pays a tax under this section:
1101
(i) shall pay for a taxable year an amount equal to the product of the nonresident
1102
individual's:
1103
(A) unapportioned state tax; and
1104
(B) state income tax percentage for the nonresident individual; and
1105
(ii) is exempt from paying the tax imposed by Section
59-10-116
.
1106
(3) Except as required by Section
59-10-1204
or
59-10-1205
, a resident or nonresident
1107
individual that calculates and pays a tax under this section may not make any addition or
1108
adjustment to or subtraction from adjusted gross income.
1109
(4) A resident or nonresident individual that calculates and pays a tax under this
1110
section may designate on the resident or nonresident individual's individual income tax return
1111
for a taxable year a contribution allowed by:
1112
(a) Section
59-10-530
;
1113
(b) Section
59-10-530.5
;
1114
(c) Section
59-10-547
;
1115
(d) Section
59-10-549
;
1116
(e) Section
59-10-550
;
1117
(f) Section
59-10-550.1
; or
1118
(g) Section
59-10-550.2
.
1119
(5) This section does not apply to a resident or nonresident individual exempt from
1120
taxation under Section
59-10-104.1
.
1121
(6) (a) A resident or nonresident individual may determine for each taxable year for
1122
which the resident or nonresident individual files an individual income tax return under this
1123
chapter whether to calculate and pay a tax under this section as provided in this part.
1124
(b) If a resident or nonresident individual files an amended return for a taxable year
1125
beginning on or after January 1, 2007, the resident or nonresident individual may determine
1126
whether to calculate and pay a tax under this section as provided in this part for that taxable
1127
year.
1128
Section 12.
Section
59-10-1206.1
is enacted to read:
1129
59-10-1206.1. Definitions -- Nonrefundable taxpayer tax credits.
1130
(1) As used in this section:
1131
(a) "Claimant" means a resident or nonresident individual that has state taxable income
1132
under this part.
1133
(b) "Head of household filing status" means a head of household, as defined in Section
1134
2(b), Internal Revenue Code, who files a single return.
1135
(c) "Joint filing status" means:
1136
(i) a husband and wife who file a single return jointly; or
1137
(ii) a surviving spouse, as defined in Section 2(a), Internal Revenue Code, who files a
1138
single return.
1139
(d) "Single filing status" means:
1140
(i) a single individual who files a single return; or
1141
(ii) a married individual who:
1142
(A) does not file a single return jointly with that individual's spouse; and
1143
(B) files a single return.
1144
(2) Except as provided in Section
59-10-1206.9
and subject to Subsections (3) through
1145
(5), for taxable years beginning on or after January 1, 2008, a claimant may claim a
1146
nonrefundable tax credit against taxes otherwise due under this part equal to the sum of:
1147
(a) (i) for a claimant that deducts the standard deduction on the claimant's federal
1148
individual income tax return for the taxable year, 6% of the amount the claimant deducts as
1149
allowed as the standard deduction on the claimant's federal individual income tax return for
1150
that taxable year; or
1151
(ii) for a claimant that itemizes deductions on the claimant's federal individual income
1152
tax return for the taxable year, the product of:
1153
(A) the difference between:
1154
(I) the amount the claimant deducts as allowed as an itemized deduction on the
1155
claimant's federal individual income tax return for that taxable year; and
1156
(II) any amount of state or local income taxes the claimant deducts as allowed as an
1157
itemized deduction on the claimant's federal individual income tax return for that taxable year;
1158
and
1159
(B) 6%; and
1160
(b) 6% of the total amount the claimant would have been allowed to claim as a
1161
personal exemption deduction on the claimant's state individual income tax return had the
1162
claimant filed an individual income tax return under Part 1, Determination and Reporting of
1163
Tax Liability and Information, for the taxable year.
1164
(3) A claimant may not carry forward or carry back a tax credit under this section.
1165
(4) The tax credit allowed by Subsection (2) shall be reduced by $.013 for each dollar
1166
by which a claimant's state taxable income exceeds:
1167
(a) for a claimant who has a single filing status, $12,000;
1168
(b) for a claimant who has a head of household filing status, $18,000; or
1169
(c) for a claimant who has a joint filing status, $24,000.
1170
(5) (a) For taxable years beginning on or after January 1, 2009, the commission shall
1171
increase or decrease the following dollar amounts by a percentage equal to the percentage
1172
difference between the consumer price index for the preceding calendar year and the consumer
1173
price index for calendar year 2007:
1174
(i) the dollar amount listed in Subsection (4)(a); and
1175
(ii) the dollar amount listed in Subsection (4)(b).
1176
(b) After the commission increases or decreases the dollar amounts listed in Subsection
1177
(5)(a), the commission shall round those dollar amounts listed in Subsection (5)(a) to the
1178
nearest whole dollar.
1179
(c) After the commission rounds the dollar amounts as required by Subsection (5)(b),
1180
the commission shall increase or decrease the dollar amount listed in Subsection (4)(c) so that
1181
the dollar amount listed in Subsection (4)(c) is equal to the product of:
1182
(i) the dollar amount listed in Subsection (4)(a); and
1183
(ii) two.
1184
(d) For purposes of Subsection (5)(a), the commission shall calculate the consumer
1185
price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
1186
Section 13.
Section
59-10-1206.2
is enacted to read:
1187
59-10-1206.2. Definitions -- Nonrefundable retirement tax credits.
1188
(1) As used in this section:
1189
(a) "Eligible age 65 or older retiree" means a resident or nonresident individual,
1190
regardless of whether that individual is retired, who:
1191
(i) is 65 years of age or older;
1192
(ii) was born on or before December 31, 1952; and
1193
(iii) has state taxable income under this part.
1194
(b) (i) "Eligible retirement income" means income received by an eligible under age 65
1195
retiree as a pension or annuity if that pension or annuity is:
1196
(A) paid to the eligible under age 65 retiree or the surviving spouse of an eligible under
1197
age 65 retiree; and
1198
(B) (I) paid from an annuity contract purchased by an employer under a plan that meets
1199
the requirements of Section 404(a)(2), Internal Revenue Code;
1200
(II) purchased by an employee under a plan that meets the requirements of Section 408,
1201
Internal Revenue Code; or
1202
(III) paid by:
1203
(Aa) the United States;
1204
(Bb) a state or a political subdivision of a state; or
1205
(Cc) the District of Columbia.
1206
(ii) "Eligible retirement income" does not include amounts received by the spouse of a
1207
living eligible under age 65 retiree because of the eligible under age 65 retiree's having been
1208
employed in a community property state.
1209
(c) "Eligible under age 65 retiree" means a resident or nonresident individual,
1210
regardless of whether that individual is retired, who:
1211
(i) is younger than 65 years of age;
1212
(ii) was born on or before December 31, 1952;
1213
(iii) has eligible retirement income for the taxable year for which a tax credit is claimed
1214
under this section; and
1215
(iv) has state taxable income under this part.
1216
(d) "Head of household filing status" is as defined in Section
59-10-1206.1
.
1217
(e) "Joint filing status" is as defined in Section
59-10-1206.1
.
1218
(f) "Married filing separately status" means a married individual who:
1219
(i) does not file a single return jointly with that individual's spouse; and
1220
(ii) files a single return.
1221
(g) "Modified adjusted gross income" means the sum of an eligible age 65 or older
1222
retiree's or eligible under age 65 retiree's:
1223
(i) adjusted gross income for the taxable year for which a tax credit is claimed under
1224
this section; and
1225
(ii) any interest income that is not included in adjusted gross income for the taxable
1226
year described in Subsection (1)(g)(i).
1227
(h) "Single filing status" means a single individual who files a single return.
1228
(2) Except as provided in Section
59-10-1206.9
and subject to Subsections (3) through
1229
(6), for taxable years beginning on or after January 1, 2008:
1230
(a) each eligible age 65 or older retiree may claim a nonrefundable tax credit of $450
1231
against taxes otherwise due under this part; or
1232
(b) each eligible under age 65 retiree may claim a nonrefundable tax credit against
1233
taxes otherwise due under this part in an amount equal to the lesser of:
1234
(i) $288; or
1235
(ii) the product of:
1236
(A) the eligible under age 65 retiree's eligible retirement income for the taxable year for
1237
which the eligible under age 65 retiree claims a tax credit under this section; and
1238
(B) 6%.
1239
(3) A tax credit under this section may not be carried forward or carried back.
1240
(4) The sum of the tax credits allowed by Subsection (2)(a) claimed on one return filed
1241
under this part shall be reduced by $.025 for each dollar by which an eligible age 65 or older
1242
retiree's modified adjusted gross income exceeds:
1243
(a) for an eligible age 65 or older retiree who has a married filing separately status,
1244
$16,000;
1245
(b) for an eligible age 65 or older retiree who has a single filing status, $25,000; or
1246
(c) for an eligible age 65 or older retiree who has a head of household filing status or a
1247
joint filing status, $32,000.
1248
(5) The sum of the tax credits allowed by Subsection (2)(b) claimed on one return filed
1249
under this part shall be reduced by $.025 for each dollar by which an eligible under age 65
1250
retiree's modified adjusted gross income exceeds:
1251
(a) for an eligible under age 65 retiree who has a married filing separately status,
1252
$16,000;
1253
(b) for an eligible under age 65 retiree who has a single filing status, $25,000; or
1254
(c) for an eligible under age 65 retiree who has a head of household filing status or a
1255
joint filing status, $32,000.
1256
(6) For purposes of determining the ownership of items of retirement income under this
1257
section, common law doctrine shall be applied in all cases even though some items of
1258
retirement income may have originated from service or investments in a community property
1259
state.
1260
Section 14.
Section
59-10-1206.9
is enacted to read:
1261
59-10-1206.9. Apportionment of tax credits.
1262
A nonresident individual or a part-year resident individual that claims a tax credit in
1263
accordance with Section
59-10-1206.1
or
59-10-1206.2
may only claim an apportioned amount
1264
of the tax credit equal to:
1265
(1) for a nonresident individual, the product of:
1266
(a) the state income tax percentage for the nonresident individual; and
1267
(b) the amount of the tax credit that the nonresident individual would have been
1268
allowed to claim but for the apportionment requirements of this section; or
1269
(2) for a part-year resident individual, the product of:
1270
(a) the state income tax percentage for the part-year resident individual; and
1271
(b) the amount of the tax credit that the part-year resident individual would have been
1272
allowed to claim but for the apportionment requirements of this section.
1273
Section 15.
Section
59-12-102
is amended to read:
1274
59-12-102. Definitions.
1275
As used in this chapter:
1276
(1) (a) "Admission or user fees" includes season passes.
1277
(b) "Admission or user fees" does not include annual membership dues to private
1278
organizations.
1279
(2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
1280
Section
59-12-102.1
.
1281
(3) "Agreement combined tax rate" means the sum of the tax rates:
1282
(a) listed under Subsection (4); and
1283
(b) that are imposed within a local taxing jurisdiction.
1284
(4) "Agreement sales and use tax" means a tax imposed under:
1285
(a) Subsection
59-12-103
(2)(a)(i) or (2)(b)(iii)(A);
1286
(b) Section
59-12-204
;
1287
(c) Section
59-12-401
;
1288
(d) Section
59-12-402
;
1289
(e) Section
59-12-501
;
1290
(f) Section
59-12-502
;
1291
(g) Section
59-12-703
;
1292
(h) Section
59-12-802
;
1293
(i) Section
59-12-804
;
1294
(j) Section
59-12-1001
;
1295
(k) Section
59-12-1102
;
1296
(l) Section
59-12-1302
;
1297
(m) Section
59-12-1402
; [or]
1298
(n) Section
59-12-1503
[.]; or
1299
(o) Section
59-12-1703
.
1300
(5) "Aircraft" is as defined in Section
72-10-102
.
1301
(6) "Alcoholic beverage" means a beverage that:
1302
(a) is suitable for human consumption; and
1303
(b) contains .5% or more alcohol by volume.
1304
(7) "Area agency on aging" is as defined in Section
62A-3-101
.
1305
(8) "Assisted amusement device" means an amusement device, skill device, or ride
1306
device that is started and stopped by an individual:
1307
(a) who is not the purchaser or renter of the right to use or operate the amusement
1308
device, skill device, or ride device; and
1309
(b) at the direction of the seller of the right to use the amusement device, skill device,
1310
or ride device.
1311
(9) "Assisted cleaning or washing of tangible personal property" means cleaning or
1312
washing of tangible personal property if the cleaning or washing labor is primarily performed
1313
by an individual:
1314
(a) who is not the purchaser of the cleaning or washing of the tangible personal
1315
property; and
1316
(b) at the direction of the seller of the cleaning or washing of the tangible personal
1317
property.
1318
(10) "Authorized carrier" means:
1319
(a) in the case of vehicles operated over public highways, the holder of credentials
1320
indicating that the vehicle is or will be operated pursuant to both the International Registration
1321
Plan and the International Fuel Tax Agreement;
1322
(b) in the case of aircraft, the holder of a Federal Aviation Administration operating
1323
certificate or air carrier's operating certificate; or
1324
(c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
1325
stock, the holder of a certificate issued by the United States Surface Transportation Board.
1326
(11) (a) Except as provided in Subsection (11)(b), "biomass energy" means any of the
1327
following that is used as the primary source of energy to produce fuel or electricity:
1328
(i) material from a plant or tree; or
1329
(ii) other organic matter that is available on a renewable basis, including:
1330
(A) slash and brush from forests and woodlands;
1331
(B) animal waste;
1332
(C) methane produced:
1333
(I) at landfills; or
1334
(II) as a byproduct of the treatment of wastewater residuals;
1335
(D) aquatic plants; and
1336
(E) agricultural products.
1337
(b) "Biomass energy" does not include:
1338
(i) black liquor;
1339
(ii) treated woods; or
1340
(iii) biomass from municipal solid waste other than methane produced:
1341
(A) at landfills; or
1342
(B) as a byproduct of the treatment of wastewater residuals.
1343
(12) (a) "Bundled transaction" means the sale of two or more items of tangible personal
1344
property if:
1345
(i) one or more of the items of tangible personal property is food and food ingredients;
1346
and
1347
(ii) the items of tangible personal property are:
1348
(A) distinct and identifiable; and
1349
(B) sold for one price that is not itemized.
1350
(b) "Bundled transaction" does not include the sale of tangible personal property if the
1351
sales price varies, or is negotiable, on the basis of the selection by the purchaser of the items of
1352
tangible personal property included in the transaction.
1353
(c) For purposes of Subsection (12)(a)(ii)(A), tangible personal property that is distinct
1354
and identifiable does not include:
1355
(i) packaging that:
1356
(A) accompanies the sale of the tangible personal property; and
1357
(B) is incidental or immaterial to the sale of the tangible personal property;
1358
(ii) tangible personal property provided free of charge with the purchase of another
1359
item of tangible personal property; or
1360
(iii) an item of tangible personal property included in the definition of "purchase
1361
price."
1362
(d) For purposes of Subsection (12)(c)(ii), an item of tangible personal property is
1363
provided free of charge with the purchase of another item of tangible personal property if the
1364
sales price of the purchased item of tangible personal property does not vary depending on the
1365
inclusion of the tangible personal property provided free of charge.
1366
(13) "Certified automated system" means software certified by the governing board of
1367
the agreement in accordance with Section
59-12-102.1
that:
1368
(a) calculates the agreement sales and use tax imposed within a local taxing
1369
jurisdiction:
1370
(i) on a transaction; and
1371
(ii) in the states that are members of the agreement;
1372
(b) determines the amount of agreement sales and use tax to remit to a state that is a
1373
member of the agreement; and
1374
(c) maintains a record of the transaction described in Subsection (13)(a)(i).
1375
(14) "Certified service provider" means an agent certified:
1376
(a) by the governing board of the agreement in accordance with Section
59-12-102.1
;
1377
and
1378
(b) to perform all of a seller's sales and use tax functions for an agreement sales and
1379
use tax other than the seller's obligation under Section
59-12-107.4
to remit a tax on the seller's
1380
own purchases.
1381
(15) (a) Subject to Subsection (15)(b), "clothing" means all human wearing apparel
1382
suitable for general use.
1383
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1384
commission shall make rules:
1385
(i) listing the items that constitute "clothing"; and
1386
(ii) that are consistent with the list of items that constitute "clothing" under the
1387
agreement.
1388
(16) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
1389
(17) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
1390
fuels that does not constitute industrial use under Subsection [(39)] (40) or residential use
1391
under Subsection [(76)] (77).
1392
(18) (a) "Common carrier" means a person engaged in or transacting the business of
1393
transporting passengers, freight, merchandise, or other property for hire within this state.
1394
(b) (i) "Common carrier" does not include a person who, at the time the person is
1395
traveling to or from that person's place of employment, transports a passenger to or from the
1396
passenger's place of employment.
1397
(ii) For purposes of Subsection (18)(b)(i), in accordance with Title 63, Chapter 46a,
1398
Utah Administrative Rulemaking Act, the commission may make rules defining what
1399
constitutes a person's place of employment.
1400
(19) "Component part" includes:
1401
(a) poultry, dairy, and other livestock feed, and their components;
1402
(b) baling ties and twine used in the baling of hay and straw;
1403
(c) fuel used for providing temperature control of orchards and commercial
1404
greenhouses doing a majority of their business in wholesale sales, and for providing power for
1405
off-highway type farm machinery; and
1406
(d) feed, seeds, and seedlings.
1407
(20) "Computer" means an electronic device that accepts information:
1408
(a) (i) in digital form; or
1409
(ii) in a form similar to digital form; and
1410
(b) manipulates that information for a result based on a sequence of instructions.
1411
(21) "Computer software" means a set of coded instructions designed to cause:
1412
(a) a computer to perform a task; or
1413
(b) automatic data processing equipment to perform a task.
1414
(22) "Construction materials" means any tangible personal property that will be
1415
converted into real property.
1416
(23) "Delivered electronically" means delivered to a purchaser by means other than
1417
tangible storage media.
1418
(24) (a) "Delivery charge" means a charge:
1419
(i) by a seller of:
1420
(A) tangible personal property; or
1421
(B) services; and
1422
(ii) for preparation and delivery of the tangible personal property or services described
1423
in Subsection (24)(a)(i) to a location designated by the purchaser.
1424
(b) "Delivery charge" includes a charge for the following:
1425
(i) transportation;
1426
(ii) shipping;
1427
(iii) postage;
1428
(iv) handling;
1429
(v) crating; or
1430
(vi) packing.
1431
(25) (a) "Dental prosthesis" means the following if fabricated in a laboratory:
1432
(i) a bridge;
1433
(ii) a crown if that crown covers at least 75% of a tooth structure;
1434
(iii) a denture;
1435
(iv) an implant;
1436
(v) an orthodontic device designed to:
1437
(A) retain the position or spacing of teeth; and
1438
(B) replace a missing tooth;
1439
(vi) a partial denture; or
1440
(vii) a device similar to Subsections (25)(a)(i) through (vi).
1441
(b) "Dental prosthesis" does not include an appliance or device, other than a device
1442
described in Subsection (25)(a), if that appliance or device is used in orthodontic therapy to
1443
apply force to the teeth and their supporting structures to:
1444
(i) produce changes in their relationship to each other; and
1445
(ii) control their growth and development.
1446
[(25)] (26) "Dietary supplement" means a product, other than tobacco, that:
1447
(a) is intended to supplement the diet;
1448
(b) contains one or more of the following dietary ingredients:
1449
(i) a vitamin;
1450
(ii) a mineral;
1451
(iii) an herb or other botanical;
1452
(iv) an amino acid;
1453
(v) a dietary substance for use by humans to supplement the diet by increasing the total
1454
dietary intake; or
1455
(vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
1456
described in Subsections [(25)] (26)(b)(i) through (v);
1457
(c) (i) except as provided in Subsection [(25)] (26)(c)(ii), is intended for ingestion in:
1458
(A) tablet form;
1459
(B) capsule form;
1460
(C) powder form;
1461
(D) softgel form;
1462
(E) gelcap form; or
1463
(F) liquid form; or
1464
(ii) notwithstanding Subsection [(25)] (26)(c)(i), if the product is not intended for
1465
ingestion in a form described in Subsections [(25)] (26)(c)(i)(A) through (F), is not
1466
represented:
1467
(A) as conventional food; and
1468
(B) for use as a sole item of:
1469
(I) a meal; or
1470
(II) the diet; and
1471
(d) is required to be labeled as a dietary supplement:
1472
(i) identifiable by the "Supplemental Facts" box found on the label; and
1473
(ii) as required by 21 C.F.R. Sec. 101.36.
1474
[(26)] (27) (a) "Direct mail" means printed material delivered or distributed by United
1475
States mail or other delivery service:
1476
(i) to:
1477
(A) a mass audience; or
1478
(B) addressees on a mailing list provided by a purchaser of the mailing list; and
1479
(ii) if the cost of the printed material is not billed directly to the recipients.
1480
(b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
1481
purchaser to a seller of direct mail for inclusion in a package containing the printed material.
1482
(c) "Direct mail" does not include multiple items of printed material delivered to a
1483
single address.
1484
[(27)] (28) (a) "Drug" means a compound, substance, or preparation, or a component of
1485
a compound, substance, or preparation that is:
1486
(i) recognized in:
1487
(A) the official United States Pharmacopoeia;
1488
(B) the official Homeopathic Pharmacopoeia of the United States;
1489
(C) the official National Formulary; or
1490
(D) a supplement to a publication listed in Subsections [(27)] (28)(a)(i)(A) through
1491
(C);
1492
(ii) intended for use in the:
1493
(A) diagnosis of disease;
1494
(B) cure of disease;
1495
(C) mitigation of disease;
1496
(D) treatment of disease; or
1497
(E) prevention of disease; or
1498
(iii) intended to affect:
1499
(A) the structure of the body; or
1500
(B) any function of the body.
1501
(b) "Drug" does not include:
1502
(i) food and food ingredients;
1503
(ii) a dietary supplement;
1504
(iii) an alcoholic beverage; or
1505
(iv) a prosthetic device.
1506
[(28)] (29) (a) Except as provided in Subsection [(28)] (29)(c), "durable medical
1507
equipment" means equipment that:
1508
(i) can withstand repeated use;
1509
(ii) is primarily and customarily used to serve a medical purpose;
1510
(iii) generally is not useful to a person in the absence of illness or injury; and
1511
(iv) is not worn in or on the body.
1512
(b) "Durable medical equipment" includes parts used in the repair or replacement of the
1513
equipment described in Subsection [(28)] (29)(a).
1514
(c) Notwithstanding Subsection [(28)] (29)(a), "durable medical equipment" does not