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S.B. 242
1
INCOME TAX ADDITIONS, SUBTRACTIONS,
2
AND TAX CREDITS FOR HIGHER
3
EDUCATION SAVINGS
4
2007 GENERAL SESSION
5
STATE OF UTAH
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Chief Sponsor: Gregory S. Bell
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House Sponsor:
Stephen H. Urquhart
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9
LONG TITLE
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General Description:
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This bill amends the Corporate Franchise and Income Taxes chapter and the Individual
12
Income Tax Act relating to additions to and subtractions from income for higher
13
education savings and to provide a tax credit for higher education savings.
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Highlighted Provisions:
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This bill:
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. provides and modifies definitions;
17
. addresses the maximum amount of a qualified investment in the Utah Educational
18
Savings Plan Trust that a person, estate, or trust may:
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. subtract from federal taxable income; or
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. use as the basis for claiming a tax credit;
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. modifies and clarifies the amount of a qualified investment in the Utah Educational
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Savings Plan Trust that a corporation may subtract from federal taxable income;
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. modifies an addition to income for a corporation or a resident or nonresident
24
individual who is an account owner under the Utah Educational Savings Plan Trust
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for amounts not expended for higher education costs under certain circumstances;
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. repeals an individual income tax subtraction for a qualified investment in the Utah
27
Educational Savings Plan Trust;
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. provides that a resident or nonresident estate or trust may subtract certain qualified
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investments in the Utah Educational Savings Plan Trust from federal taxable
30
income;
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. requires a resident or nonresident estate or trust that is an account owner under the
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Utah Educational Savings Plan Trust to add to federal taxable income amounts not
33
expended for higher education costs under certain circumstances;
34
. allows an individual income tax and single rate individual income tax credit for
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qualified investments in the Utah Educational Savings Plan Trust Fund; and
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. makes technical changes.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill has retrospective operation for taxable years beginning on or after January 1,
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2007.
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Utah Code Sections Affected:
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AMENDS:
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53B-8a-102, as last amended by Chapter 109, Laws of Utah 2005
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53B-8a-103, as last amended by Chapter 109, Laws of Utah 2005
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53B-8a-104, as enacted by Chapter 4, Laws of Utah 1996, Second Special Session
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53B-8a-105, as last amended by Chapter 109, Laws of Utah 2005
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53B-8a-106, as last amended by Chapter 223, Laws of Utah 2006
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53B-8a-107, as last amended by Chapter 109, Laws of Utah 2005
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53B-8a-108, as last amended by Chapter 109, Laws of Utah 2005
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53B-8a-109, as last amended by Chapter 109, Laws of Utah 2005
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53B-8a-111, as enacted by Chapter 4, Laws of Utah 1996, Second Special Session
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53B-8a-112, as enacted by Chapter 4, Laws of Utah 1996, Second Special Session
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53B-8a-113, as last amended by Chapter 109, Laws of Utah 2005
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59-7-105, as last amended by Chapter 109, Laws of Utah 2005
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59-7-106, as last amended by Chapter 211, Laws of Utah 2002
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59-10-103, as last amended by Chapter 2, Laws of Utah 2006, Fourth Special Session
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59-10-114, as last amended by Chapter 2, Laws of Utah 2006, Fourth Special Session
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59-10-202, as last amended by Chapter 2, Laws of Utah 2006, Fourth Special Session
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59-10-1204, as enacted by Chapter 2, Laws of Utah 2006, Fourth Special Session
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ENACTS:
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59-10-1015.1, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
53B-8a-102
is amended to read:
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53B-8a-102. Definitions.
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As used in this chapter:
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(1) "Account agreement" means an agreement between an account owner and the Utah
69
Educational Savings Plan Trust entered into under this chapter.
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(2) "Account owner" means [an individual, firm, corporation, or its legal representative
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or legal successor, who] a person, estate, or trust, if that person, estate, or trust has entered into
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an account agreement under this chapter for the advance payment of higher education costs on
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behalf of a beneficiary.
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(3) "Administrative fund" means the moneys used to administer the Utah Educational
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Savings Plan Trust.
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(4) "Beneficiary" means the individual designated in an account agreement to benefit
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from payments for higher education costs at an institution of higher education.
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(5) "Benefits" means the payment of higher education costs on behalf of a beneficiary
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by the Utah Educational Savings Plan Trust during the beneficiary's attendance at an institution
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of higher education.
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(6) "Board" means the board of directors of the Utah Educational Savings Plan Trust
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which is the state Board of Regents acting in its capacity as the Utah Higher Education
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Assistance Authority under Title 53B, Chapter 12.
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(7) "Endowment fund" means the endowment fund established under Section
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53B-8a-107
which is held as a separate fund within the Utah Educational Savings Plan Trust.
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(8) "Higher education costs" means [the certified costs of tuition, fees, room and board,
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books, supplies, and equipment required for the enrollment or attendance of a designated
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beneficiary at an institution of higher education] qualified higher education expenses as defined
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in Section 529(e)(3), Internal Revenue Code.
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(9) "Institution of higher education" means a qualified proprietary school approved by
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the board, a two-year or four-year public or regionally accredited private nonprofit college or
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university or a Utah college of applied technology, with regard to students enrolled in
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postsecondary training or education programs.
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(10) "Program administrator" means the administrator of the Utah Educational Savings
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Plan Trust appointed by the board to administer and manage the Utah Educational Savings Plan
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Trust.
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(11) "Program fund" means the program fund created under Section
53B-8a-107
,
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which is held as a separate fund within the Utah Educational Savings Plan Trust.
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(12) "Qualified investment" means an amount invested in accordance with an account
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agreement established under this chapter.
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[(12)] (13) "Tuition and fees" means the quarterly or semester charges imposed to
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attend an institution of higher education and required as a condition of enrollment.
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[(13)] (14) "Utah Educational Savings Plan Trust" [or "trust"] means the Utah
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Educational Savings Plan Trust created under Section
53B-8a-103
.
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[(14)] (15) "Vested account" means an account agreement which has been in full force
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and effect during eight continuous years of residency of the beneficiary in the state while
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participating in the Utah Educational Savings Plan Trust.
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Section 2.
Section
53B-8a-103
is amended to read:
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53B-8a-103. Creation of Utah Educational Savings Plan Trust.
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(1) There is created the Utah Educational Savings Plan Trust.
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(2) The board is the trustee of the Utah Educational Savings Plan Trust.
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(3) The board, in the capacity of trustee, may:
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(a) exercise any authority granted by law to the Board of Regents;
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(b) make and enter into contracts necessary for the administration of the Utah
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Educational Savings Plan Trust created under this chapter;
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(c) adopt a corporate seal and change and amend it from time to time;
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(d) invest moneys within the program fund:
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(i) (A) in any investments that are determined by the board to be appropriate and are
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approved by the state treasurer; or
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(B) in mutual funds registered under the Investment Company Act of 1940, consistent
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with the best interests of a designated beneficiary's higher education funding needs; and
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(ii) are in compliance with rules of the State Money Management Council applicable to
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gift funds;
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(e) invest moneys within the endowment fund in any investments that are:
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(i) determined by the board to be appropriate;
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(ii) approved by the state treasurer; and
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(iii) in compliance with rules of the State Money Management Council applicable to
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gift funds;
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(f) enter into agreements with any institution of higher education, any federal or state
130
agency, or other entity as required to implement this chapter;
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(g) accept any grants, gifts, legislative appropriations, and other moneys from the state,
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any unit of federal, state, or local government, or any other person, firm, partnership, or
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corporation for deposit to the administrative fund, endowment fund, or the program fund;
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(h) enter into account agreements with account owners;
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(i) make payments to institutions of higher education pursuant to account agreements
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on behalf of beneficiaries;
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(j) make refunds to account owners upon the termination of account agreements
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pursuant to the provisions of this chapter;
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(k) appoint a program administrator and determine the duties of the program
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administrator and other staff as necessary and fix their compensation;
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(l) make provision for the payment of costs of administration and operation of the Utah
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Educational Savings Plan Trust; and
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(m) carry out the duties and obligations of the Utah Educational Savings Plan Trust
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pursuant to this chapter.
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Section 3.
Section
53B-8a-104
is amended to read:
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53B-8a-104. Office facilities, clerical, and administrative support for the Utah
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Educational Savings Plan Trust.
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(1) The board shall provide to the Utah Educational Savings Plan Trust, by agreement,
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administrative and clerical support and office facilities and space.
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(2) Reasonable charges or fees may be levied against the Utah Educational Savings
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Plan Trust pursuant to the agreement for the services provided by the board.
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Section 4.
Section
53B-8a-105
is amended to read:
153
53B-8a-105. Additional powers of board as to the Utah Educational Savings Plan
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Trust.
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The board has all powers necessary to carry out and effectuate the purposes, objectives,
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and provisions of this chapter pertaining to the Utah Educational Savings Plan Trust, including
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the power to:
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(1) engage:
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(a) one or more investment advisors, registered under the Investment Advisors Act of
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1940, with at least 5,000 advisory clients and at least $1,000,000,000 under management, to
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provide investment advice to the board with respect to the assets held in each account;
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(b) an administrator to perform recordkeeping functions on behalf of the Utah
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Educational Savings Plan Trust; and
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(c) a custodian for the safekeeping of the assets of the Utah Educational Savings Plan
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Trust;
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(2) carry out studies and projections in order to advise account owners regarding
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present and estimated future higher education costs and levels of financial participation in the
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Utah Educational Savings Plan Trust required in order to enable account owners to achieve
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their educational funding objective;
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(3) contract for goods and services and engage personnel as necessary, including
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consultants, actuaries, managers, counsel, and auditors for the purpose of rendering
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professional, managerial, and technical assistance and advice, all of which contract obligations
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and services shall be payable from any moneys of the Utah Educational Savings Plan Trust;
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(4) participate in any other way in any federal, state, or local governmental program for
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the benefit of the Utah Educational Savings Plan Trust;
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(5) promulgate, impose, and collect administrative fees and charges in connection with
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transactions of the Utah Educational Savings Plan Trust, and provide for reasonable service
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charges, including penalties for cancellations and late payments;
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(6) procure insurance against any loss in connection with the property, assets, or
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activities of the Utah Educational Savings Plan Trust;
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(7) administer the funds of the Utah Educational Savings Plan Trust;
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(8) solicit and accept for the benefit of the endowment fund gifts, grants, and other
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moneys, including general fund moneys from the state and grants from any federal or other
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governmental agency;
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(9) procure insurance indemnifying any member of the board from personal loss or
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accountability arising from liability resulting from a member's action or inaction as a member
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of the board; and
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(10) make rules and regulations for the administration of the Utah Educational Savings
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Plan Trust.
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Section 5.
Section
53B-8a-106
is amended to read:
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53B-8a-106. Account agreements.
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The Utah Educational Savings Plan Trust may enter into account agreements with
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account owners on behalf of beneficiaries under the following terms and agreements:
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(1) (a) An account agreement may require an account owner to agree to invest a
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specific amount of money in the Utah Educational Savings Plan Trust for a specific period of
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time for the benefit of a specific beneficiary, not to exceed an amount determined by the
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program administrator.
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(b) Account agreements may be amended to provide for adjusted levels of payments
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based upon changed circumstances or changes in educational plans.
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(c) An account owner may make additional optional payments as long as the total
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payments for a specific beneficiary do not exceed the total estimated higher education costs as
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determined by the program administrator.
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(d) Subject to Subsection (1)(f), the maximum amount of a qualified investment that a
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corporation that is an account owner may subtract from unadjusted income for a taxable year in
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accordance with Title 59, Chapter 7, Corporate Franchise and Income Taxes, is $1,560 for each
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individual beneficiary for the taxable year beginning on or after January 1, 2006, but beginning
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on or before December 31, 2006.
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[(d) The] (e) Subject to Subsection (1)(f), the maximum amount of [investments] a
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qualified investment that may be subtracted from federal taxable income [of a resident or
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nonresident individual under Subsection
59-10-114
(2)(i) shall be $1,510] of a resident or
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nonresident estate or trust for a taxable year in accordance with Section
59-10-202
or used as
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the basis for claiming a tax credit by a resident or nonresident individual in accordance with
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Section
59-10-1015.1
or
59-10-1206
, is:
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(i) for a resident or nonresident estate or trust that is an account owner, $1,560 for each
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individual beneficiary for the [2005 calendar year and an amount adjusted annually thereafter
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to reflect increases in the Consumer Price Index.] taxable year beginning on or after January 1,
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2006, but beginning on or before December 31, 2006;
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(ii) for a resident or nonresident individual that is an account owner, other than a
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husband and wife who file a single return jointly, $1,560 for each individual beneficiary for the
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taxable year beginning on or after January 1, 2006, but beginning on or before December 31,
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2006;
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(iii) for a husband and wife who are account owners and file a single return jointly,
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$3,120 for each individual beneficiary:
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(A) for the taxable year beginning on or after January 1, 2006, but beginning on or
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before December 31, 2006; and
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(B) regardless of whether the Utah Educational Savings Plan Trust has entered into:
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(I) a separate account agreement with each spouse; or
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(II) a single account agreement with both spouses jointly.
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(f) (i) For taxable years beginning on or after January 1, 2007, the program
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administrator shall increase or decrease the maximum amount of a qualified investment
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described in Subsections (1)(d) and (1)(e)(i) and (ii), by a percentage equal to the percentage
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difference between the consumer price index for the preceding calendar year and the consumer
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price index for the calendar year 2005.
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(ii) After making an increase or decrease required by Subsection (1)(f)(i), the program
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administrator shall:
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(A) round the maximum amount of the qualified investments described in Subsections
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(1)(d) and (1)(e)(i) and (ii) increased or decreased under Subsection (1)(f)(i) to the nearest ten
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dollar increment; and
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(B) increase or decrease the maximum amount of the qualified investment described in
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Subsection (1)(e)(iii) so that the maximum amount of the qualified investment described in
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Subsection (1)(e)(iii) is equal to the product of:
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(I) the maximum amount of the qualified investment described in Subsection (1)(e)(ii)
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as rounded under Subsection (1)(f)(ii)(A); and
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(II) two.
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(iii) For purposes of Subsections (1)(f)(i) and (ii), the program administrator shall
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calculate the consumer price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue
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Code.
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(2) (a) (i) Beneficiaries designated in account agreements must be designated after
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birth and before age 19 for [the participant] an account owner to:
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(A) subtract [allowable investments] a qualified investment from [federal taxable]
251
income under [Subsection
59-10-114
(2)(i).]:
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(I) Title 59, Chapter 7, Corporate Franchise and Income Taxes; or
253
(II) Section
59-10-202
; or
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(B) use a qualified investment as the basis for claiming a tax credit in accordance with:
255
(I) Section
59-10-1015.1
; or
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(II) Section
59-10-1206
.
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(ii) If the beneficiary is designated after birth and before age 19, the payment of
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benefits provided under the account agreement must begin not later than the beneficiary's 27th
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birthday.
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(b) (i) Account owners may designate beneficiaries age 19 or older, but investments for
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those beneficiaries are not eligible for subtraction from federal taxable income.
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(ii) If a beneficiary age 19 or older is designated, the payment of benefits provided
263
under the account agreement must begin not later than ten years from the account agreement
264
date.
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(3) Each account agreement shall state clearly that there are no guarantees regarding
266
moneys in the Utah Educational Savings Plan Trust as to the return of principal and that losses
267
could occur.
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(4) Each account agreement shall provide that:
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(a) no contributor to, or designated beneficiary under, an account agreement may direct
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the investment of any contributions or earnings on contributions;
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(b) no part of the money in any account may be used as security for a loan; and
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(c) no account owner may borrow from the Utah Educational Savings Plan Trust.
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(5) The execution of an account agreement by the trust may not guarantee in any way
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that higher education costs will be equal to projections and estimates provided by the Utah
275
Educational Savings Plan Trust or that the beneficiary named in any participation agreement
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will:
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(a) be admitted to an institution of higher education;
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(b) if admitted, be determined a resident for tuition purposes by the institution of
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higher education, unless the account agreement is vested;
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(c) be allowed to continue attendance at the institution of higher education following
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admission; or
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(d) graduate from the institution of higher education.
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(6) Beneficiaries may be changed as permitted by the rules and regulations of the board
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upon written request of the account owner prior to the date of admission of any beneficiary
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under an account agreement by an institution of higher education so long as the substitute
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beneficiary is eligible for participation.
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(7) Account agreements may be freely amended throughout their terms in order to
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enable account owners to increase or decrease the level of participation, change the designation
289
of beneficiaries, and carry out similar matters as authorized by rule.
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(8) Each account agreement shall provide that:
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(a) the account agreement may be canceled upon the terms and conditions, and upon
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payment of the fees and costs set forth and contained in the board's rules and regulations; and
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(b) the program administrator may amend the agreement unilaterally and retroactively,
294
if necessary, to maintain the Utah Educational Savings Plan Trust as a qualified tuition
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program under Section 529 Internal Revenue Code.
296
Section 6.
Section
53B-8a-107
is amended to read:
297
53B-8a-107. Program, endowment, and administrative funds -- Investment and
298
payments from funds.
299
(1) (a) The board shall segregate moneys received by the Utah Educational Savings
300
Plan Trust into three funds, the program fund, the endowment fund, and the administrative
301
fund.
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(b) No more than two percentage points of the interest earned annually in the
303
endowment fund may be transferred to the administrative fund for the purpose of paying
304
operating costs associated with administering the Utah Educational Savings Plan Trust and as
305
required under Sections
53B-8a-103
through
53B-8a-105
.
306
(c) Transfers may be made from the program fund to the administrative fund to pay
307
operating costs:
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(i) associated with administering the Utah Educational Savings Plan Trust and as
309
required under Sections
53B-8a-103
through
53B-8a-105
; and
310
(ii) as included in the budget approved by the board of directors of the Utah
311
Educational Savings Plan Trust.
312
(d) All moneys paid by account owners in connection with account agreements shall be
313
deposited as received into separate accounts within the program fund which shall be promptly
314
invested and accounted for separately.
315
(e) All moneys received by the Utah Educational Savings Plan Trust from the proceeds
316
of gifts and other endowments for the purposes of the Utah Educational Savings Plan Trust
317
shall be deposited as received into the endowment fund, which shall be promptly invested and
318
accounted for separately.
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(f) Any gifts, grants, or donations made by any governmental unit or any person, firm,
320
partnership, or corporation to the Utah Educational Savings Plan Trust for deposit to the
321
endowment fund shall be a grant, gift, or donation to the state for the accomplishment of a
322
valid public eleemosynary, charitable, and educational purpose and shall not be included in the
323
income of the donor for Utah tax purposes.
324
(2) (a) Through March 31, 2005, each account owner under an account agreement may
325
receive an interest in a portion, as determined by policy, of the investment income derived by
326
the endowment fund in any year during which funds are invested in the program fund on behalf
327
of the beneficiary, to be payable as provided in Subsection (2)(c).
328
(b) The interest in the investment income derived by the endowment fund that accrues
329
to a beneficiary in any year shall be in the ratio that the principal amount paid by the account
330
owner under the account agreement and investment income earned to date under the agreement
331
bears to the principal amount of all moneys, funds, and securities then held in the program fund
332
during the year.
333
(c) (i) Except as provided in Subsection (2)(c)(ii), at the time any payments or
334
disbursements for higher education costs are made from the Utah Educational Savings Plan
335
Trust to any institution of higher education under an account agreement, the Utah Educational
336
Savings Plan Trust shall add to that payment from endowment fund income a pro rata portion
337
of the amount calculated pursuant to Subsection (2)(b), which shall be transferred directly to
338
the institution of higher education simultaneously with the payment made from the program
339
fund and shall be used for payment of the higher education costs of the beneficiary, but not to
340
exceed the amount which, in combination with the current payment due from the program
341
fund, equals the beneficiary's higher education costs for the current period of enrollment.
342
(ii) Effective March 31, 2005, any interest income on the endowment fund accruing to
343
a beneficiary that has not been transferred to an institution of higher education pursuant to
344
Subsection (2)(c)(i) shall be transferred to the beneficiary's program fund account.
345
(3) Beginning on April 1, 2005:
346
(a) interest income on the endowment fund may be used to enhance the savings of low
347
income account owners investing in the Utah Educational Savings Plan Trust, as provided by
348
rules of the board; and
349
(b) the original principal in the endowment fund may be transferred to the
350
administrative fund upon approval by the board.
351
(4) Endowment fund earnings not accruing to a beneficiary under a participation
352
agreement or not transferred to the administrative fund shall be reinvested in the endowment
353
fund.
354
(5) Moneys accrued by account owners in the program fund of the Utah Educational
355
Savings Plan Trust may be used for payments to any institution of higher education.
356
(6) No rights to any moneys derived from the endowment fund shall exist if moneys
357
payable under the account agreement are paid to an education institution which is not an
358
institution of higher education as defined in Section
53B-8a-102
.
359
Section 7.
Section
53B-8a-108
is amended to read:
360
53B-8a-108. Cancellation of agreements.
361
(1) Any account owner may cancel an account agreement at will.
362
(2) If an account agreement is cancelled by the account owner, the current account
363
balance shall be disbursed to the account owner less:
364
(a) an administrative refund fee, which may be charged by the Utah Educational
365
Savings Plan Trust, except as provided in Subsection (3); and
366
(b) any penalty or tax required to be withheld by the Internal Revenue Code.
367
(3) An administration refund fee may not be levied by the Utah Educational Savings
368
Plan Trust if the account agreement is cancelled due to:
369
(a) the death of the beneficiary; or
370
(b) the permanent disability or mental incapacity of the beneficiary.
371
(4) The board shall make rules for the disposition of monies transferred to an account
372
pursuant to Subsection
53A-8a-107
(2)(c)(ii) and the earnings on those monies when an account
373
agreement is cancelled.
374
Section 8.
Section
53B-8a-109
is amended to read:
375
53B-8a-109. Repayment and ownership of payments and investment income --
376
Transfer of ownership rights.
377
(1) (a) The account owner retains ownership of all payments made under the account
378
agreement until utilized to pay higher education costs for the beneficiary.
379
(b) All income derived from the investment of the payments made by the account
380
owner shall be considered to be held in trust for the benefit of the beneficiary.
381
(2) The institution of higher education shall obtain ownership of the payments made
382
for the higher education costs paid to the institution at the time each payment is made to the
383
institution.
384
(3) Any amounts that may be paid pursuant to the Utah Educational Savings Plan Trust
385
that are not listed in this section are owned by the Utah Educational Savings Plan Trust.
386
(4) (a) An account owner may transfer ownership rights to another eligible person.
387
(b) The transfer shall be affected and the property distributed in accordance with
388
administrative regulations promulgated by the board or the terms of the account agreement.
389
Section 9.
Section
53B-8a-111
is amended to read:
390
53B-8a-111. Annual audited financial report to governor, Legislature, and state
391
auditor.
392
(1) The board shall submit an annual audited financial report, prepared in accordance
393
with generally accepted accounting principles, on the operations of the Utah Educational
394
Savings Plan Trust by November 1 to the governor, the Legislature, and the state auditor.
395
(2) The annual audit shall be made either by the state auditor or by an independent
396
certified public accountant designated by the state auditor and shall include direct and indirect
397
costs attributable to the use of outside consultants, independent contractors, and any other
398
persons who are not state employees.
399
(3) The annual audit shall be supplemented by the following information prepared by
400
the board:
401
(a) any studies or evaluations prepared in the preceding year;
402
(b) a summary of the benefits provided by the Utah Educational Savings Plan Trust
403
including the number of participants and beneficiaries in the Utah Educational Savings Plan
404
Trust; and
405
(c) any other information which is relevant in order to make a full, fair, and effective
406
disclosure of the operations of the Utah Educational Savings Plan Trust.
407
Section 10.
Section
53B-8a-112
is amended to read:
408
53B-8a-112. Tax considerations.
409
(1) For tax purposes the property of the Utah Educational Savings Plan Trust and its
410
income are governed by Sections
59-7-105
,
59-7-106
,
59-10-114
, [and]
59-10-201
, and
411
59-10-202
.
412
(2) The tax commission, in consultation with the board, may adopt rules necessary to
413
monitor and implement the tax provisions referred to in Subsection (1) as related to the
414
property of the Utah Educational Savings Plan Trust and its income.
415
Section 11.
Section
53B-8a-113
is amended to read:
416
53B-8a-113. Property rights to assets in Utah Educational Savings Plan Trust.
417
(1) The assets of the Utah Educational Savings Plan Trust, including the program fund
418
and the endowment fund, shall at all times be preserved, invested, and expended solely and
419
only for the purposes of the Utah Educational Savings Plan Trust and shall be held in trust for
420
the account owners and beneficiaries.
421
(2) No property rights in the Utah Educational Savings Plan Trust shall exist in favor
422
of the state.
423
(3) The assets may not be transferred or used by the state for any purposes other than
424
the purposes of the Utah Educational Savings Plan Trust.
425
Section 12.
Section
59-7-105
is amended to read:
426
59-7-105. Additions to unadjusted income.
427
In computing adjusted income the following amounts shall be added to unadjusted
428
income:
429
(1) interest from bonds, notes, and other evidences of indebtedness issued by any state
430
of the United States, including any agency and instrumentality of a state of the United States;
431
(2) the amount of any deduction taken on a corporation's federal return for taxes paid
432
by a corporation:
433
(a) to Utah for taxes imposed by this chapter; and
434
(b) to another state of the United States, a foreign country, a United States possession,
435
or the Commonwealth of Puerto Rico for taxes imposed for the privilege of doing business, or
436
exercising its corporate franchise, including income, franchise, corporate stock and business
437
and occupation taxes;
438
(3) the safe harbor lease adjustment required under Subsections
59-7-111
(1)(a) and
439
(2)(a);
440
(4) capital losses that have been deducted on a Utah corporate return in previous years;
441
(5) any deduction on the federal return that has been previously deducted on the Utah
442
return;
443
(6) the amount of contributions claimed as a tax credit pursuant to Section
59-7-602
;
444
(7) the amount of the deduction taken pursuant to Section
59-7-603
for sophisticated
445
technological equipment;
446
(8) charitable contributions, to the extent deducted on the federal return when
447
determining federal taxable income;
448
(9) the amount of gain or loss determined under Section
59-7-114
relating to a target
449
corporation under Section 338, Internal Revenue Code, unless such gain or loss has already
450
been included in the unadjusted income of the target corporation;
451
(10) the amount of gain or loss determined under Section
59-7-115
relating to
452
corporations treated for federal purposes as having disposed of its assets under Section 336(e),
453
Internal Revenue Code, unless such gain or loss has already been included in the unadjusted
454
income of the target corporation;
455
(11) adjustments to gains, losses, depreciation expense, amortization expense, and
456
similar items due to a difference between basis for federal purposes and basis as computed
457
under Section
59-7-107
; and
458
(12) the amount [disbursed to] withdrawn under Title 53B, Chapter 8a, Higher
459
Education Savings Incentive Program, from the account of a corporation that is an account
460
owner [under Title 53B, Chapter 8a, Higher Education Savings Incentive Program, to the
461
extent deducted on a Utah return in previous years and not used for qualified higher education
462
costs of the beneficiary, in the year in which the amount is disbursed.] as defined in Section
463
53B-8a-102
, for the taxable year for which the amount is withdrawn, if that amount withdrawn
464
from the account of the corporation that is the account owner:
465
(a) is not expended for higher education costs as defined in Section
53B-8a-102
; and
466
(b) is subtracted by the corporation:
467
(i) that is the account owner; and
468
(ii) in accordance with Subsection
59-7-106
(18).
469
Section 13.
Section
59-7-106
is amended to read:
470
59-7-106. Subtractions from unadjusted income.
471
In computing adjusted income the following amounts shall be subtracted from
472
unadjusted income:
473
(1) the foreign dividend gross-up included in gross income for federal income tax
474
purposes under Section 78, Internal Revenue Code;
475
(2) the net capital loss, as defined for federal purposes, if the taxpayer elects to deduct
476
the loss on the current Utah return. The deduction shall be made by claiming the deduction on
477
the current Utah return which shall be filed by the due date of the return, including extensions.
478
For the purposes of this Subsection all capital losses in a given year must be:
479
(a) deducted in the year incurred; or
480
(b) carried forward as provided in Sections 1212(a)(1)(B) and (C), Internal Revenue
481
Code;
482
(3) the decrease in salary expense deduction for federal income tax purposes due to
483
claiming the federal jobs credit under Section 51, Internal Revenue Code;
484
(4) the decrease in qualified research and basic research expense deduction for federal
485
income tax purposes due to claiming the federal research and development credit under Section
486
41, Internal Revenue Code;
487
(5) the decrease in qualified clinical testing expense deduction for federal income tax
488
purposes due to claiming the federal orphan drug credit under Section 28, Internal Revenue
489
Code;
490
(6) any decrease in any expense deduction for federal income tax purposes due to
491
claiming any other federal credit;
492
(7) the safe harbor lease adjustment required under Subsections
59-7-111
(1)(b) and
493
(2)(b);
494
(8) any income on the federal corporate return that has been previously taxed by Utah;
495
(9) amounts included in federal taxable income that are due to refunds of taxes
496
imposed for the privilege of doing business, or exercising a corporate franchise, including
497
income, franchise, corporate stock and business and occupation taxes paid by the corporation to
498
Utah, another state of the United States, a foreign country, a United States possession, or the
499
Commonwealth of Puerto Rico to the extent that the taxes were added to unadjusted income
500
under Section
59-7-105
;
501
(10) charitable contributions, to the extent allowed as a subtraction under Section
502
59-7-109
;
503
(11) (a) 50% of the dividends deemed received or received from subsidiaries which are
504
members of the unitary group and are organized or incorporated outside of the United States
505
unless such subsidiaries are included in a combined report under Section
59-7-402
or
59-7-403
.
506
In arriving at the amount of the dividend exclusion, the taxpayer shall first deduct from the
507
dividends deemed received or received, the expense directly attributable to those dividends.
508
Interest expense attributable to excluded dividends shall be determined by multiplying interest
509
expense by a fraction, the numerator of which is the taxpayer's average investment in such
510
dividend paying subsidiaries, and the denominator of which is the taxpayer's average total
511
investment in assets;
512
(b) in determining income apportionable to this state, a portion of the factors of a
513
foreign subsidiary whose dividends are partially excluded under Subsection (11)(a) shall be
514
included in the combined report factors. The portion to be included shall be determined by
515
multiplying each factor of the foreign subsidiary by a fraction, but not to exceed 100%, the
516
numerator of which is the amount of the dividend paid by the foreign subsidiary which is
517
included in adjusted income, and the denominator of which is the current year earnings and
518
profits of the foreign subsidiary as determined under the Internal Revenue Code;
519
(12) (a) 50% of the adjusted income of a foreign operating company unless the
520
taxpayer has elected to file a worldwide combined report as provided in Section
59-7-403
. For
521
purposes of this Subsection, when calculating the adjusted income of a foreign operating
522
company, a foreign operating company may not deduct the subtractions allowable under this
523
Subsection (12) and Subsection (11);
524
(b) in determining income apportionable to this state, the factors for a foreign operating
525
company shall be included in the combined report factors in the same percentage its adjusted
526
income is included in the combined adjusted income;
527
(13) the amount of gain or loss which is included in unadjusted income but not
528
recognized for federal purposes on stock sold or exchanged by a member of a selling
529
consolidated group as defined in Section 338, Internal Revenue Code, if an election has been
530
made pursuant to Section 338(h)(10), Internal Revenue Code;
531
(14) the amount of gain or loss which is included in unadjusted income but not
532
recognized for federal purposes on stock sold, exchanged, or distributed by a corporation
533
pursuant to Section 336(e), Internal Revenue Code, if an election under Section 336(e), Internal
534
Revenue Code, has been made for federal purposes;
535
(15) (a) adjustments to gains, losses, depreciation expense, amortization expense, and
536
similar items due to a difference between basis for federal purposes and basis as computed
537
under Section
59-7-107
; and
538
(b) if there has been a reduction in federal basis for a federal tax credit where there is
539
no corresponding Utah tax credit, the amount of the reduction in basis shall be allowed as an
540
expense in the year of the federal credit;
541
(16) any interest expense not deducted on the federal corporate return under Section
542
265(b) or 291(e), Internal Revenue Code;
543
(17) 100% of the dividends received from subsidiaries which are insurance companies
544
exempt from this chapter under Subsection
59-7-102
(1)(c) and are under "common ownership"
545
as defined by Subsection
59-7-101
(7); and
546
[(18) any amount included in unadjusted income that was derived from money paid by
547
the taxpayer to the program fund and investment income earned on those payments under Title
548
53B, Chapter 8a, Higher Education Savings Incentive Program, that is included in federal
549
taxable income, but only when the monies are used for qualified higher education costs of the
550
beneficiary.]
551
(18) subject to Subsection
59-7-105
(12), the amount of a qualified investment as
552
defined in Section
53B-8a-102
that:
553
(a) a corporation that is an account owner as defined in Section
53B-8a-102
makes
554
during the taxable year;
555
(b) the corporation described in Subsection (18)(a) does not deduct on a federal
556
corporation income tax return; and
557
(c) does not exceed the maximum amount of the qualified investment that may be
558
subtracted from unadjusted income for a taxable year in accordance with Subsections
559
53B-8a-106
(1)(d) and (f).
560
Section 14.
Section
59-10-103
is amended to read:
561
59-10-103. Definitions.
562
(1) As used in this chapter:
563
(a) "Adjusted gross income":
564
(i) for a resident or nonresident individual, is as defined in Section 62, Internal
565
Revenue Code; or
566
(ii) for a resident or nonresident estate or trust, is as calculated in Section 67(e),
567
Internal Revenue Code.
568
(b) "Adoption expenses" means:
569
(i) any actual medical and hospital expenses of the mother of the adopted child which
570
are incident to the child's birth;
571
(ii) any welfare agency fees or costs;
572
(iii) any child placement service fees or costs;
573
(iv) any legal fees or costs; or
574
(v) any other fees or costs relating to an adoption.
575
(c) "Adult with a disability" means an individual who:
576
(i) is 18 years of age or older;
577
(ii) is eligible for services under Title 62A, Chapter 5, Services for People with
578
Disabilities; and
579
(iii) is not enrolled in:
580
(A) an education program for students with disabilities that is authorized under Section
581
53A-15-301
; or
582
(B) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind.
583
(d) (i) For purposes of Subsection
59-10-114
(2)[(l)](k), "capital gain transaction"
584
means a transaction that results in a:
585
(A) short-term capital gain; or
586
(B) long-term capital gain.
587
(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
588
the commission may by rule define the term "transaction."
589
(e) "Commercial domicile" means the principal place from which the trade or business
590
of a Utah small business corporation is directed or managed.
591
(f) "Corporation" includes:
592
(i) associations;
593
(ii) joint stock companies; and
594
(iii) insurance companies.
595
(g) "Dependent child with a disability" means an individual 21 years of age or younger
596
who:
597
(i) (A) is diagnosed by a school district representative under rules adopted by the State
598
Board of Education as having a disability classified as:
599
(I) autism;
600
(II) deafness;
601
(III) preschool developmental delay;
602
(IV) dual sensory impairment;
603
(V) hearing impairment;
604
(VI) intellectual disability;
605
(VII) multidisability;
606
(VIII) orthopedic impairment;
607
(IX) other health impairment;
608
(X) traumatic brain injury; or
609
(XI) visual impairment;
610
(B) is not receiving residential services from:
611
(I) the Division of Services for People with Disabilities created under Section
612
62A-5-102
; or
613
(II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
614
and
615
(C) is enrolled in:
616
(I) an education program for students with disabilities that is authorized under Section
617
53A-15-301
; or
618
(II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
619
or
620
(ii) is identified under guidelines of the Department of Health as qualified for:
621
(A) Early Intervention; or
622
(B) Infant Development Services.
623
(h) "Distributable net income" is as defined in Section 643, Internal Revenue Code.
624
(i) "Employee" is as defined in Section
59-10-401
.
625
(j) "Employer" is as defined in Section
59-10-401
.
626
(k) "Federal taxable income":
627
(i) for a resident or nonresident individual, means taxable income as defined by Section
628
63, Internal Revenue Code; or
629
(ii) for a resident or nonresident estate or trust, is as calculated in Section 641(a) and
630
(b), Internal Revenue Code.
631
(l) "Fiduciary" means:
632
(i) a guardian;
633
(ii) a trustee;
634
(iii) an executor;
635
(iv) an administrator;
636
(v) a receiver;
637
(vi) a conservator; or
638
(vii) any person acting in any fiduciary capacity for any individual.
639
(m) "Homesteaded land diminished from the Uintah and Ouray Reservation" means the
640
homesteaded land that was held to have been diminished from the Uintah and Ouray
641
Reservation in Hagen v. Utah, 510 U.S. 399 (1994).
642
(n) "Individual" means a natural person and includes aliens and minors.
643
(o) "Irrevocable trust" means a trust in which the settlor may not revoke or terminate
644
all or part of the trust without the consent of a person who has a substantial beneficial interest
645
in the trust and the interest would be adversely affected by the exercise of the settlor's power to
646
revoke or terminate all or part of the trust.
647
(p) For purposes of Subsection
59-10-114
(2)[(l)](k), "long-term capital gain" is as
648
defined in Section 1222, Internal Revenue Code.
649
(q) "Nonresident individual" means an individual who is not a resident of this state.
650
(r) "Nonresident trust" or "nonresident estate" means a trust or estate which is not a
651
resident estate or trust.
652
(s) (i) "Partnership" includes a syndicate, group, pool, joint venture, or other
653
unincorporated organization:
654
(A) through or by means of which any business, financial operation, or venture is
655
carried on; and
656
(B) which is not, within the meaning of this chapter:
657
(I) a trust;
658
(II) an estate; or
659
(III) a corporation.
660
(ii) "Partnership" does not include any organization not included under the definition of
661
"partnership" in Section 761, Internal Revenue Code.
662
(iii) "Partner" includes a member in a syndicate, group, pool, joint venture, or
663
organization described in Subsection (1)(s)(i).
664
(t) "Qualifying military servicemember" means a member of:
665
(i) The Utah Army National Guard;
666
(ii) The Utah Air National Guard; or
667
(iii) the following if the member is assigned to a unit that is located in the state:
668
(A) The Army Reserve;
669
(B) The Naval Reserve;
670
(C) The Air Force Reserve;
671
(D) The Marine Corps Reserve; or
672
(E) The Coast Guard Reserve.
673
(u) "Qualifying stock" means stock that is:
674
(i) (A) common; or
675
(B) preferred;
676
(ii) as defined by the commission by rule, originally issued to:
677
(A) a resident or nonresident individual; or
678
(B) a partnership if the resident or nonresident individual making a subtraction from
679
federal taxable income in accordance with Subsection
59-10-114
(2)[(l)](k):
680
(I) was a partner when the stock was issued; and
681
(II) remains a partner until the last day of the taxable year for which the resident or
682
nonresident individual makes the subtraction from federal taxable income in accordance with
683
Subsection
59-10-114
(2)[(l)](k); and
684
(iii) issued:
685
(A) by a Utah small business corporation;
686
(B) on or after January 1, 2003; and
687
(C) for:
688
(I) money; or
689
(II) other property, except for stock or securities.
690
(v) (i) "Resident individual" means:
691
(A) an individual who is domiciled in this state for any period of time during the
692
taxable year, but only for the duration of the period during which the individual is domiciled in
693
this state; or
694
(B) an individual who is not domiciled in this state but:
695
(I) maintains a permanent place of abode in this state; and
696
(II) spends in the aggregate 183 or more days of the taxable year in this state.
697
(ii) For purposes of Subsection (1)(v)(i)(B), a fraction of a calendar day shall be
698
counted as a whole day.
699
(w) "Resident estate" or "resident trust" is as defined in Section
75-7-103
.
700
(x) For purposes of Subsection
59-10-114
(2)[(l)](k), "short-term capital gain" is as
701
defined in Section 1222, Internal Revenue Code.
702
(y) "Taxable income" or "state taxable income":
703
(i) subject to Subsection
59-10-302
(2), for a resident individual other than a resident
704
individual described in Subsection (1)(y)(iii), means the resident individual's federal taxable
705
income after making the:
706
(A) additions and subtractions required by Section
59-10-114
; and
707
(B) adjustments required by Section
59-10-115
;
708
(ii) for a nonresident individual other than a nonresident individual described in
709
Subsection (1)(y)(iii), is as defined in Section
59-10-116
;
710
(iii) for a resident or nonresident individual that collects and pays a tax described in
711
Part 12, Single Rate Individual Income Tax Act, is as defined in Section
59-10-1202
;
712
(iv) for a resident estate or trust, is as calculated under Section
59-10-201.1
; and
713
(v) for a nonresident estate or trust, is as calculated under Section
59-10-204
.
714
(z) "Taxpayer" means any individual, estate, or trust or beneficiary of an estate or trust,
715
whose income is subject in whole or part to the tax imposed by this chapter.
716
(aa) "Uintah and Ouray Reservation" means the lands recognized as being included
717
within the Uintah and Ouray Reservation in:
718
(i) Hagen v. Utah, 510 U.S. 399 (1994); and
719
(ii) Ute Indian Tribe v. Utah, 114 F.3d 1513 (10th Cir. 1997).
720
(bb) (i) "Utah small business corporation" means a corporation that:
721
(A) is a small business corporation as defined in Section 1244(c)(3), Internal Revenue
722
Code;
723
(B) except as provided in Subsection (1)(bb)(ii), meets the requirements of Section
724
1244(c)(1)(C), Internal Revenue Code; and
725
(C) has its commercial domicile in this state.
726
(ii) Notwithstanding Subsection (1)(bb)(i)(B), the time period described in Section
727
1244(c)(1)(C) and Section 1244(c)(2), Internal Revenue Code, for determining the source of a
728
corporation's aggregate gross receipts shall end on the last day of the taxable year for which the
729
resident or nonresident individual makes a subtraction from federal taxable income in
730
accordance with Subsection
59-10-114
(2)[(l)](k).
731
(cc) "Ute tribal member" means a person who is enrolled as a member of the Ute
732
Indian Tribe of the Uintah and Ouray Reservation.
733
(dd) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray Reservation.
734
(ee) "Wages" is as defined in Section
59-10-401
.
735
(2) (a) Any term used in this chapter has the same meaning as when used in
736
comparable context in the laws of the United States relating to federal income taxes unless a
737
different meaning is clearly required.
738
(b) Any reference to the Internal Revenue Code or to the laws of the United States shall
739
mean the Internal Revenue Code or other provisions of the laws of the United States relating to
740
federal income taxes that are in effect for the taxable year.
741
(c) Any reference to a specific section of the Internal Revenue Code or other provision
742
of the laws of the United States relating to federal income taxes shall include any
743
corresponding or comparable provisions of the Internal Revenue Code as hereafter amended,
744
redesignated, or reenacted.
745
Section 15.
Section
59-10-114
is amended to read:
746
59-10-114. Additions to and subtractions from federal taxable income of an
747
individual.
748
(1) There shall be added to federal taxable income of a resident or nonresident
749
individual:
750
(a) the amount of any income tax imposed by this or any predecessor Utah individual
751
income tax law and the amount of any income tax imposed by the laws of another state, the
752
District of Columbia, or a possession of the United States, to the extent deducted from adjusted
753
gross income in determining federal taxable income;
754
(b) a lump sum distribution that the taxpayer does not include in adjusted gross income
755
on the taxpayer's federal individual income tax return for the taxable year;
756
(c) for taxable years beginning on or after January 1, 2002, the amount of a child's
757
income calculated under Subsection (5) that:
758
(i) a parent elects to report on the parent's federal individual income tax return for the
759
taxable year; and
760
(ii) the parent does not include in adjusted gross income on the parent's federal
761
individual income tax return for the taxable year;
762
(d) 25% of the personal exemptions, as defined and calculated in the Internal Revenue
763
Code;
764
(e) a withdrawal from a medical care savings account and any penalty imposed in the
765
taxable year if:
766
(i) the resident or nonresident individual did not deduct or include the amounts on the
767
resident or nonresident individual's federal individual income tax return pursuant to Section
768
220, Internal Revenue Code;
769
(ii) the withdrawal is subject to Subsections
31A-32a-105
(1) and (2); and
770
(iii) the withdrawal is deducted by the resident or nonresident individual under
771
Subsection (2)(h);
772
(f) the amount [disbursed to] withdrawn under Title 53B, Chapter 8a, Higher
773
Education Savings Incentive Program, from the account of a resident or nonresident individual
774
who is an account owner [under Title 53B, Chapter 8a, Higher Education Savings Incentive
775
Program] as defined in Section
53B-8a-102
, for the taxable year for which the amount is
776
[disbursed] withdrawn, if that amount [disbursed to] withdrawn from the account of the
777
resident or nonresident individual who is the account owner:
778
(i) is not expended for higher education costs as defined in Section
53B-8a-102
; and
779
(ii) is:
780
(A) deducted by the account owner [under Subsection (2)(i);] on an individual income
781
tax return:
782
(I) under this chapter; and
783
(II) filed for a taxable year beginning on or before December 31, 2006; or
784
(B) used as the basis for the resident or nonresident individual who is the account
785
owner to claim a tax credit under this chapter;
786
(g) except as provided in Subsection (6), for taxable years beginning on or after
787
January 1, 2003, for bonds, notes, and other evidences of indebtedness acquired on or after
788
January 1, 2003, the interest from bonds, notes, and other evidences of indebtedness issued by
789
one or more of the following entities:
790
(i) a state other than this state;
791
(ii) the District of Columbia;
792
(iii) a political subdivision of a state other than this state; or
793
(iv) an agency or instrumentality of an entity described in Subsections (1)(g)(i) through
794
(iii);
795
(h) subject to Subsection (2)[(n)](m), any distribution received by a resident
796
beneficiary of a resident trust of income that was taxed at the trust level for federal tax
797
purposes, but was subtracted from state taxable income of the trust pursuant to Subsection
798
59-10-202
(2)(c);
799
(i) any distribution received by a resident beneficiary of a nonresident trust of
800
undistributed distributable net income realized by the trust on or after January 1, 2004, if that
801
undistributed distributable net income was taxed at the trust level for federal tax purposes, but
802
was not taxed at the trust level by any state, with undistributed distributable net income
803
considered to be distributed from the most recently accumulated undistributed distributable net
804
income; and
805
(j) any adoption expense:
806
(i) for which a resident or nonresident individual receives reimbursement from another
807
person; and
808
(ii) to the extent to which the resident or nonresident individual deducts that adoption
809
expense:
810
(A) under Subsection (2)(c); or
811
(B) from federal taxable income on a federal individual income tax return.
812
(2) There shall be subtracted from federal taxable income of a resident or nonresident
813
individual:
814
(a) the interest or a dividend on obligations or securities of the United States and its
815
possessions or of any authority, commission, or instrumentality of the United States, to the
816
extent that interest or dividend is included in gross income for federal income tax purposes for
817
the taxable year but exempt from state income taxes under the laws of the United States, but
818
the amount subtracted under this Subsection (2)(a) shall be reduced by any interest on
819
indebtedness incurred or continued to purchase or carry the obligations or securities described
820
in this Subsection (2)(a), and by any expenses incurred in the production of interest or dividend
821
income described in this Subsection (2)(a) to the extent that such expenses, including
822
amortizable bond premiums, are deductible in determining federal taxable income;
823
(b) 1/2 of the net amount of any income tax paid or payable to the United States after all
824
allowable credits, as reported on the United States individual income tax return of the taxpayer
825
for the same taxable year;
826
(c) the amount of adoption expenses for one of the following taxable years as elected
827
by the resident or nonresident individual:
828
(i) regardless of whether a court issues an order granting the adoption, the taxable year
829
in which the adoption expenses are:
830
(A) paid; or
831
(B) incurred;
832
(ii) the taxable year in which a court issues an order granting the adoption; or
833
(iii) any year in which the resident or nonresident individual may claim the federal
834
adoption expenses credit under Section 23, Internal Revenue Code;
835
(d) amounts received by taxpayers under age 65 as retirement income which, for
836
purposes of this section, means pensions and annuities, paid from an annuity contract
837
purchased by an employer under a plan which meets the requirements of Section 404(a)(2),
838
Internal Revenue Code, or purchased by an employee under a plan which meets the
839
requirements of Section 408, Internal Revenue Code, or paid by the United States, a state, or
840
political subdivision thereof, or the District of Columbia, to the employee involved or the
841
surviving spouse;
842
(e) for each taxpayer age 65 or over before the close of the taxable year, a $7,500
843
personal retirement exemption;
844
(f) 75% of the amount of the personal exemption, as defined and calculated in the
845
Internal Revenue Code, for each dependent child with a disability and adult with a disability
846
who is claimed as a dependent on a taxpayer's return;
847
(g) subject to the limitations of Subsection (3)(e), amounts a taxpayer pays during the
848
taxable year for health care insurance, as defined in Title 31A, Chapter 1, General Provisions:
849
(i) for:
850
(A) the taxpayer;
851
(B) the taxpayer's spouse; and
852
(C) the taxpayer's dependents; and
853
(ii) to the extent the taxpayer does not deduct the amounts under Section 125, 162, or
854
213, Internal Revenue Code, in determining federal taxable income for the taxable year;
855
(h) (i) except as provided in this Subsection (2)(h), the amount of a contribution made
856
during the taxable year on behalf of the taxpayer to a medical care savings account and interest
857
earned on a contribution to a medical care savings account established pursuant to Title 31A,
858
Chapter 32a, Medical Care Savings Account Act, to the extent the contribution is accepted by
859
the account administrator as provided in the Medical Care Savings Account Act, and if the
860
taxpayer did not deduct or include amounts on the taxpayer's federal individual income tax
861
return pursuant to Section 220, Internal Revenue Code; and
862
(ii) a contribution deductible under this Subsection (2)(h) may not exceed either of the
863
following:
864
(A) the maximum contribution allowed under the Medical Care Savings Account Act
865
for the tax year multiplied by two for taxpayers who file a joint return, if neither spouse is
866
covered by health care insurance as defined in Section
31A-1-301
or self-funded plan that
867
covers the other spouse, and each spouse has a medical care savings account; or
868
(B) the maximum contribution allowed under the Medical Care Savings Account Act
869
for the tax year for taxpayers:
870
(I) who do not file a joint return; or
871
(II) who file a joint return, but do not qualify under Subsection (2)(h)(ii)(A);
872
[(i) the amount included in federal taxable income that was derived from money paid
873
by an account owner to the program fund under Title 53B, Chapter 8a, Higher Education
874
Savings Incentive Program, not to exceed amounts determined under Subsection
875
53B-8a-106
(1)(d), and investment income earned on account agreements entered into under
876
Section
53B-8a-106
that is included in federal taxable income, but only when the funds are
877
used for qualified higher education costs of the beneficiary;]
878
[(j)] (i) for taxable years beginning on or after January 1, 2000, any amounts paid for
879
premiums for long-term care insurance as defined in Section
31A-1-301
to the extent the
880
amounts paid for long-term care insurance were not deducted under Section 213, Internal
881
Revenue Code, in determining federal taxable income;
882
[(k)] (j) for taxable years beginning on or after January 1, 2000, if the conditions of
883
Subsection (4)(a) are met, the amount of income derived by a Ute tribal member:
884
(i) during a time period that the Ute tribal member resides on homesteaded land
885
diminished from the Uintah and Ouray Reservation; and
886
(ii) from a source within the Uintah and Ouray Reservation;
887
[(l)] (k) (i) for taxable years beginning on or after January 1, 2003, the total amount of
888
a resident or nonresident individual's short-term capital gain or long-term capital gain on a
889
capital gain transaction:
890
(A) that occurs on or after January 1, 2003;
891
(B) if 70% or more of the gross proceeds of the capital gain transaction are expended:
892
(I) to purchase qualifying stock in a Utah small business corporation; and
893
(II) within a 12-month period after the day on which the capital gain transaction occurs;
894
and
895
(C) if, prior to the purchase of the qualifying stock described in Subsection
896
(2)[(l)](k)(i)(B)(I), the resident or nonresident individual did not have an ownership interest in
897
the Utah small business corporation that issued the qualifying stock; and
898
(ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
899
commission may make rules:
900
(A) defining the term "gross proceeds"; and
901
(B) for purposes of Subsection (2)[(l)](k)(i)(C), prescribing the circumstances under
902
which a resident or nonresident individual has an ownership interest in a Utah small business
903
corporation;
904
[(m)] (l) for the taxable year beginning on or after January 1, 2005, but beginning on or
905
before December 31, 2005, the first $2,200 of income a qualifying military servicemember
906
receives:
907
(i) for service:
908
(A) as a qualifying military servicemember; or
909
(B) under an order into active service in accordance with Section
39-1-5
; and
910
(ii) to the extent that income is included in adjusted gross income on that resident or
911
nonresident individual's federal individual income tax return for that taxable year;
912
[(n)] (m) an amount received by a resident or nonresident individual or distribution
913
received by a resident or nonresident beneficiary of a resident trust:
914
(i) if that amount or distribution constitutes a refund of taxes imposed by:
915
(A) a state; or
916
(B) the District of Columbia; and
917
(ii) to the extent that amount or distribution is included in adjusted gross income for
918
that taxable year on the federal individual income tax return of the resident or nonresident
919
individual or resident or nonresident beneficiary of a resident trust;
920
[(o)] (n) the amount of a railroad retirement benefit:
921
(i) paid:
922
(A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
923
seq.;
924
(B) to a resident or nonresident individual; and
925
(C) for the taxable year; and
926
(ii) to the extent that railroad retirement benefit is included in adjusted gross income on
927
that resident or nonresident individual's federal individual income tax return for that taxable
928
year; and
929
[(p)] (o) an amount:
930
(i) received by an enrolled member of an American Indian tribe; and
931
(ii) to the extent that the state is not authorized or permitted to impose a tax under this
932
part on that amount in accordance with:
933
(A) federal law;
934
(B) a treaty; or
935
(C) a final decision issued by a court of competent jurisdiction.
936
(3) (a) For purposes of Subsection (2)(d), the amount of retirement income subtracted
937
for taxpayers under 65 shall be the lesser of the amount included in federal taxable income, or
938
$4,800, except that:
939
(i) for married taxpayers filing joint returns, for each $1 of adjusted gross income
940
earned over $32,000, the amount of the retirement income exemption that may be subtracted
941
shall be reduced by 50 cents;
942
(ii) for married taxpayers filing separate returns, for each $1 of adjusted gross income
943
earned over $16,000, the amount of the retirement income exemption that may be subtracted
944
shall be reduced by 50 cents; and
945
(iii) for individual taxpayers, for each $1 of adjusted gross income earned over
946
$25,000, the amount of the retirement income exemption that may be subtracted shall be
947
reduced by 50 cents.
948
(b) For purposes of Subsection (2)(e), the amount of the personal retirement exemption
949
shall be further reduced according to the following schedule:
950
(i) for married taxpayers filing joint returns, for each $1 of adjusted gross income
951
earned over $32,000, the amount of the personal retirement exemption shall be reduced by 50
952
cents;
953
(ii) for married taxpayers filing separate returns, for each $1 of adjusted gross income
954
earned over $16,000, the amount of the personal retirement exemption shall be reduced by 50
955
cents; and
956
(iii) for individual taxpayers, for each $1 of adjusted gross income earned over
957
$25,000, the amount of the personal retirement exemption shall be reduced by 50 cents.
958
(c) For purposes of Subsections (3)(a) and (b), adjusted gross income shall be
959
calculated by adding to adjusted gross income any interest income not otherwise included in
960
adjusted gross income.
961
(d) For purposes of determining ownership of items of retirement income common law
962
doctrine will be applied in all cases even though some items may have originated from service
963
or investments in a community property state. Amounts received by the spouse of a living
964
retiree because of the retiree's having been employed in a community property state are not
965
deductible as retirement income of such spouse.
966
(e) For purposes of Subsection (2)(g), a subtraction for an amount paid for health care
967
insurance as defined in Title 31A, Chapter 1, General Provisions, is not allowed:
968
(i) for an amount that is reimbursed or funded in whole or in part by the federal
969
government, the state, or an agency or instrumentality of the federal government or the state;
970
and
971
(ii) for a taxpayer who is eligible to participate in a health plan maintained and funded
972
in whole or in part by the taxpayer's employer or the taxpayer's spouse's employer.
973
(4) (a) A subtraction for an amount described in Subsection (2)[(k)](j) is allowed only
974
if:
975
(i) the taxpayer is a Ute tribal member; and
976
(ii) the governor and the Ute tribe execute and maintain an agreement meeting the
977
requirements of this Subsection (4).
978
(b) The agreement described in Subsection (4)(a):
979
(i) may not:
980
(A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
981
(B) provide a subtraction under this section greater than or different from the
982
subtraction described in Subsection (2)[(k)](j); or
983
(C) affect the power of the state to establish rates of taxation; and
984
(ii) shall:
985
(A) provide for the implementation of the subtraction described in Subsection
986
(2)[(k)](j);
987
(B) be in writing;
988
(C) be signed by:
989
(I) the governor; and
990
(II) the chair of the Business Committee of the Ute tribe;
991
(D) be conditioned on obtaining any approval required by federal law; and
992
(E) state the effective date of the agreement.
993
(c) (i) The governor shall report to the commission by no later than February 1 of each
994
year regarding whether or not an agreement meeting the requirements of this Subsection (4) is
995
in effect.
996
(ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the
997
subtraction permitted under Subsection (2)[(k)](j) is not allowed for taxable years beginning on
998
or after the January 1 following the termination of the agreement.
999
(d) For purposes of Subsection (2)[(k)](j) and in accordance with Title 63, Chapter 46a,
1000
Utah Administrative Rulemaking Act, the commission may make rules:
1001
(i) for determining whether income is derived from a source within the Uintah and
1002
Ouray Reservation; and
1003
(ii) that are substantially similar to how adjusted gross income derived from Utah
1004
sources is determined under Section
59-10-117
.
1005
(5) (a) For purposes of this Subsection (5), "Form 8814" means:
1006
(i) the federal individual income tax Form 8814, Parents' Election To Report Child's
1007
Interest and Dividends; or
1008
(ii) (A) for taxable years beginning on or after January 1, 2002, a form designated by
1009
the commission in accordance with Subsection (5)(a)(ii)(B) as being substantially similar to
1010
2000 Form 8814 if for purposes of federal individual income taxes the information contained
1011
on 2000 Form 8814 is reported on a form other than Form 8814; and
1012
(B) for purposes of Subsection (5)(a)(ii)(A) and in accordance with Title 63, Chapter
1013
46a, Utah Administrative Rulemaking Act, the commission may make rules designating a form
1014
as being substantially similar to 2000 Form 8814 if for purposes of federal individual income
1015
taxes the information contained on 2000 Form 8814 is reported on a form other than Form
1016
8814.
1017
(b) The amount of a child's income added to adjusted gross income under Subsection
1018
(1)(c) is equal to the difference between:
1019
(i) the lesser of:
1020
(A) the base amount specified on Form 8814; and
1021
(B) the sum of the following reported on Form 8814:
1022
(I) the child's taxable interest;
1023
(II) the child's ordinary dividends; and
1024
(III) the child's capital gain distributions; and
1025
(ii) the amount not taxed that is specified on Form 8814.
1026
(6) Notwithstanding Subsection (1)(g), interest from bonds, notes, and other evidences
1027
of indebtedness issued by an entity described in Subsections (1)(g)(i) through (iv) may not be
1028
added to federal taxable income of a resident or nonresident individual if, as annually
1029
determined by the commission:
1030
(a) for an entity described in Subsection (1)(g)(i) or (ii), the entity and all of the
1031
political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
1032
income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
1033
(b) for an entity described in Subsection (1)(g)(iii) or (iv), the following do not impose
1034
a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
1035
this state:
1036
(i) the entity; or
1037
(ii) (A) the state in which the entity is located; or
1038
(B) the District of Columbia, if the entity is located within the District of Columbia.
1039
Section 16.
Section
59-10-202
is amended to read:
1040
59-10-202. Additions to and subtractions from federal taxable income of a
1041
resident or nonresident estate or trust.
1042
(1) There shall be added to federal taxable income of a resident or nonresident estate or
1043
trust:
1044
(a) the amount of any income tax imposed by this or any predecessor Utah individual
1045
income tax law and the amount of any income tax imposed by the laws of another state, the
1046
District of Columbia, or a possession of the United States, to the extent deducted from federal
1047
adjusted total income as defined in Section 62, Internal Revenue Code, in determining federal
1048
taxable income;
1049
(b) a lump sum distribution allowable as a deduction under Section 402(d)(3) of the
1050
Internal Revenue Code, to the extent deductible under Section 62(a)(8) of the Internal Revenue
1051
Code in determining adjusted gross income;
1052
(c) except as provided in Subsection (3), for taxable years beginning on or after
1053
January 1, 2003, for bonds, notes, and other evidences of indebtedness acquired on or after
1054
January 1, 2003, the interest from bonds, notes, and other evidences of indebtedness issued by
1055
one or more of the following entities:
1056
(i) a state other than this state;
1057
(ii) the District of Columbia;
1058
(iii) a political subdivision of a state other than this state; or
1059
(iv) an agency or instrumentality of an entity described in Subsections (1)(c)(i) through
1060
(iii);
1061
(d) any portion of federal taxable income for a taxable year if that federal taxable
1062
income is derived from stock:
1063
(i) in an S corporation; and
1064
(ii) that is held by an electing small business trust; [and]
1065
(e) (i) the amount withdrawn under Title 53B, Chapter 8a, Higher Education Savings
1066
Incentive Program, from the account of a resident or nonresident estate or trust that is an
1067
account owner as defined in Section
53B-8a-102
, for the taxable year for which the amount is
1068
withdrawn, if that amount withdrawn from the account of the resident or nonresident estate or
1069
trust that is the account owner:
1070
(A) is not expended for higher education costs as defined in Section
53B-8a-102
; and
1071
(B) is subtracted by the resident or nonresident estate or trust:
1072
(I) that is the account owner; and
1073
(II) in accordance with Subsection (2)(j)(i); and
1074
(ii) the amount withdrawn under Title 53B, Chapter 8a, Higher Education Savings
1075
Incentive Program, from the account of a resident or nonresident estate or trust that is an
1076
account owner as defined in Section
53B-8a-102
, for the taxable year beginning on or after
1077
January 1, 2007, but beginning on or before December 31, 2007, if that amount withdrawn
1078
from the account of the resident or nonresident estate or trust that is the account owner:
1079
(A) is not expended for higher education costs as defined in Section
53B-8a-102
; and
1080
(B) is subtracted by the resident or nonresident estate or trust:
1081
(I) that is the account owner; and
1082
(II) in accordance with Subsection (2)(j)(ii); and
1083
[(e)] (f) any fiduciary adjustments required by Section
59-10-210
.
1084
(2) There shall be subtracted from federal taxable income of a resident or nonresident
1085
estate or trust:
1086
(a) the interest or a dividend on obligations or securities of the United States and its
1087
possessions or of any authority, commission, or instrumentality of the United States, to the
1088
extent that interest or dividend is included in gross income for federal income tax purposes for
1089
the taxable year but exempt from state income taxes under the laws of the United States, but
1090
the amount subtracted under this Subsection (2) shall be reduced by any interest on
1091
indebtedness incurred or continued to purchase or carry the obligations or securities described
1092
in this Subsection (2), and by any expenses incurred in the production of interest or dividend
1093
income described in this Subsection (2) to the extent that such expenses, including amortizable
1094
bond premiums, are deductible in determining federal taxable income;
1095
(b) 1/2 of the net amount of any income tax paid or payable to the United States after
1096
all allowable credits, as per the United States fiduciary income tax return of the taxpayer for the
1097
same taxable year;
1098
(c) income of an irrevocable resident trust if:
1099
(i) the income would not be treated as state taxable income derived from Utah sources
1100
under Section
59-10-204
if received by a nonresident trust;
1101
(ii) the trust first became a resident trust on or after January 1, 2004;
1102
(iii) no assets of the trust were held, at any time after January 1, 2003, in another
1103
resident irrevocable trust created by the same settlor or the spouse of the same settlor;
1104
(iv) the trustee of the trust is a trust company as defined in Subsection
7-5-1
(1)(d);
1105
(v) the amount subtracted under this Subsection (2) is reduced to the extent the settlor
1106
or any other person is treated as an owner of any portion of the trust under Subtitle A,
1107
Subchapter J, Subpart E of the Internal Revenue Code; and
1108
(vi) the amount subtracted under this Subsection (2) is reduced by any interest on
1109
indebtedness incurred or continued to purchase or carry the assets generating the income
1110
described in this Subsection (2), and by any expenses incurred in the production of income
1111
described in this Subsection (2), to the extent that those expenses, including amortizable bond
1112
premiums, are deductible in determining federal taxable income;
1113
(d) if the conditions of Subsection (4)(a) are met, the amount of income of a resident or
1114
nonresident estate or trust derived from a deceased Ute tribal member:
1115
(i) during a time period that the Ute tribal member resided on homesteaded land
1116
diminished from the Uintah and Ouray Reservation; and
1117
(ii) from a source within the Uintah and Ouray Reservation;
1118
(e) (i) for taxable years beginning on or after January 1, 2003, the total amount of a
1119
resident or nonresident estate's or trust's short-term capital gain or long-term capital gain on a
1120
capital gain transaction:
1121
(A) that occurs on or after January 1, 2003;
1122
(B) if 70% or more of the gross proceeds of the capital gain transaction are expended:
1123
(I) to purchase qualifying stock in a Utah small business corporation; and
1124
(II) within a 12-month period after the day on which the capital gain transaction occurs;
1125
and
1126
(C) if, prior to the purchase of the qualifying stock described in Subsection
1127
(2)(e)(i)(B)(I), the resident or nonresident estate or trust did not have an ownership interest in
1128
the Utah small business corporation that issued the qualifying stock; and
1129
(ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1130
commission may make rules:
1131
(A) defining the term "gross proceeds"; and
1132
(B) for purposes of Subsection (2)(e)(i)(C), prescribing the circumstances under which
1133
a resident or nonresident estate or trust has an ownership interest in a Utah small business
1134
corporation;
1135
(f) for the taxable year beginning on or after January 1, 2005, but beginning on or
1136
before December 31, 2005, the first $2,200 of income of a resident or nonresident estate or
1137
trust that is derived from a deceased qualifying military servicemember:
1138
(i) for service:
1139
(A) as a qualifying military servicemember; or
1140
(B) under an order into active service in accordance with Section
39-1-5
; and
1141
(ii) to the extent that income is included in total income on that resident or nonresident
1142
estate's or trust's federal income tax return for estates and trusts for that taxable year;
1143
(g) any amount:
1144
(i) received by a resident or nonresident estate or trust;
1145
(ii) that constitutes a refund of taxes imposed by:
1146
(A) a state; or
1147
(B) the District of Columbia; and
1148
(iii) to the extent that amount is included in total income on that resident or nonresident
1149
estate's or trust's federal tax return for estates and trusts for that taxable year;
1150
(h) the amount of a railroad retirement benefit:
1151
(i) paid:
1152
(A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
1153
seq.;
1154
(B) to a resident or nonresident estate or trust derived from a deceased resident or
1155
nonresident individual; and
1156
(C) for the taxable year; and
1157
(ii) to the extent that railroad retirement benefit is included in total income on that
1158
resident or nonresident estate's or trust's federal tax return for estates and trusts;
1159
(i) an amount:
1160
(i) received by a resident or nonresident estate or trust if that amount is derived from a
1161
deceased enrolled member of an American Indian tribe; and
1162
(ii) to the extent that the state is not authorized or permitted to impose a tax under this
1163
part on that amount in accordance with:
1164
(A) federal law;
1165
(B) a treaty; or
1166
(C) a final decision issued by a court of competent jurisdiction; [and]
1167
(j) (i) subject to Subsection (1)(e)(i), for taxable years beginning on or after January 1,
1168
2007, the amount of a qualified investment as defined in Section
53B-8a-102
that:
1169
(A) a resident or nonresident estate or trust that is an account owner as defined in
1170
Section
53B-8a-102
makes during the taxable year;
1171
(B) the resident or nonresident estate or trust described in Subsection (2)(j)(i)(A) does
1172
not deduct on a federal tax return for estates and trusts; and
1173
(C) does not exceed the maximum amount of the qualified investment that may be
1174
subtracted from federal taxable income for a taxable year in accordance with Subsections
1175
53B-8a-106
(1)(e) and (f); and
1176
(ii) subject to Subsection (1)(e)(ii), for the taxable year beginning on or after January 1,
1177
2007, but beginning on or before December 31, 2007 only, and in addition to any subtraction a
1178
resident or nonresident estate or trust that is an account owner as defined in Section
1179
53B-8a-102
makes in accordance with Subsection (2)(j)(i), the amount of a qualified
1180
investment as defined in Section
53B-8a-102
that:
1181
(A) a resident or nonresident estate or trust that is an account owner as defined in
1182
Section
53B-8a-102
could have subtracted under Subsection (2)(j)(i) for the taxable year
1183
beginning on or after January 1, 2006, but beginning on or before December 31, 2006, had the
1184
subtraction under Subsection (2)(j)(i) been in effect for the taxable year beginning on or after
1185
January 1, 2006, but beginning on or before December 31, 2006;
1186
(B) the resident or nonresident estate or trust described in Subsection (2)(j)(ii)(A)
1187
makes during the taxable year beginning on or after January 1, 2006, but beginning on or
1188
before December 31, 2006;
1189
(C) the resident or nonresident estate or trust described in Subsection (2)(j)(ii)(A) does
1190
not deduct on a federal tax return for estates and trusts; and
1191
(D) does not exceed the maximum amount of the qualified investment that may be
1192
subtracted from federal taxable income:
1193
(I) for the taxable year beginning on or after January 1, 2006, but beginning on or
1194
before December 31, 2006; and
1195
(II) in accordance with Subsections
53B-8a-106
(1)(e) and (f); and
1196
[(j)] (k) any fiduciary adjustments required by Section
59-10-210
.
1197
(3) Notwithstanding Subsection (1)(c), interest from bonds, notes, and other evidences
1198
of indebtedness issued by an entity described in Subsections (1)(c)(i) through (iv) may not be
1199
added to federal taxable income of a resident or nonresident estate or trust if, as annually
1200
determined by the commission:
1201
(a) for an entity described in Subsection (1)(c)(i) or (ii), the entity and all of the
1202
political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
1203
income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
1204
(b) for an entity described in Subsection (1)(c)(iii) or (iv), the following do not impose
1205
a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
1206
this state:
1207
(i) the entity; or
1208
(ii) (A) the state in which the entity is located; or
1209
(B) the District of Columbia, if the entity is located within the District of Columbia.
1210
(4) (a) A subtraction for an amount described in Subsection (2)(d) is allowed only if:
1211
(i) the income is derived from a deceased Ute tribal member; and
1212
(ii) the governor and the Ute tribe execute and maintain an agreement meeting the
1213
requirements of this Subsection (4).
1214
(b) The agreement described in Subsection (4)(a):
1215
(i) may not:
1216
(A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
1217
(B) provide a subtraction under this section greater than or different from the
1218
subtraction described in Subsection (2)(d); or
1219
(C) affect the power of the state to establish rates of taxation; and
1220
(ii) shall:
1221
(A) provide for the implementation of the subtraction described in Subsection (2)(d);
1222
(B) be in writing;
1223
(C) be signed by:
1224
(I) the governor; and
1225
(II) the chair of the Business Committee of the Ute tribe;
1226
(D) be conditioned on obtaining any approval required by federal law; and
1227
(E) state the effective date of the agreement.
1228
(c) (i) The governor shall report to the commission by no later than February 1 of each
1229
year regarding whether or not an agreement meeting the requirements of this Subsection (4) is
1230
in effect.
1231
(ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the
1232
subtraction permitted under Subsection (2)(d) is not allowed for taxable years beginning on or
1233
after the January 1 following the termination of the agreement.
1234
(d) For purposes of Subsection (2)(d) and in accordance with Title 63, Chapter 46a,
1235
Utah Administrative Rulemaking Act, the commission may make rules:
1236
(i) for determining whether income is derived from a source within the Uintah and
1237
Ouray Reservation; and
1238
(ii) that are substantially similar to how adjusted gross income derived from Utah
1239
sources is determined under Section
59-10-117
.
1240
Section 17.
Section
59-10-1015.1
is enacted to read:
1241
59-10-1015.1. Utah Educational Savings Plan tax credit.
1242
(1) As used in this section:
1243
(a) "Account owner" is as defined in Section
53B-8a-102
.
1244
(b) "Higher education costs" is as defined in Section
53B-8a-102
.
1245
(c) "Maximum amount of a qualified investment for the taxable year" means, for a
1246
taxable year:
1247
(i) for a claimant that is an account owner, if that claimant is a person other than a
1248
husband and wife who file a single return jointly, the maximum amount of a qualified
1249
investment:
1250
(A) listed in Subsection
53B-8a-106
(1)(e)(ii); and
1251
(B) increased or decreased for that taxable year in accordance with Subsection
1252
53B-8a-106
(1)(f); or
1253
(ii) for claimants who are husband and wife account owners who file a single return
1254
jointly, the maximum amount of a qualified investment:
1255
(A) listed in Subsection
53B-8a-106
(1)(e)(iii); and
1256
(B) increased or decreased for that taxable year in accordance with Subsection
1257
53B-8a-106
(1)(f).
1258
(d) "Qualified investment" is as defined in Section
53B-8a-102
.
1259
(2) For taxable years beginning on or after January 1, 2007, a claimant that is an
1260
account owner may claim a nonrefundable tax credit equal to the product of:
1261
(a) the lesser of:
1262
(i) the amount of a qualified investment the claimant:
1263
(A) makes during the taxable year; and
1264
(B) does not deduct on the claimant's federal individual income tax return; or
1265
(ii) the maximum amount of a qualified investment for the taxable year if the amount
1266
described in Subsection (2)(a)(i) is greater than the maximum amount of a qualified investment
1267
for the taxable year; and
1268
(b) 7%.
1269
(3) A tax credit under this section may not be carried forward or carried back.
1270
Section 18.
Section
59-10-1204
is amended to read:
1271
59-10-1204. Additions to and subtractions from adjusted gross income of a
1272
resident or nonresident individual.
1273
(1) In calculating state taxable income for purposes of this part, the following amounts
1274
shall be added to the adjusted gross income of a resident or nonresident individual:
1275
(a) the amount described in Subsection
59-10-114
(1)(a), if that amount is deducted by
1276
a resident or nonresident estate or trust in determining federal taxable income;
1277
(b) the lump sum distribution described in Subsection
59-10-114
(1)(b);
1278
(c) subject to Subsection
59-10-114
(5), the amount described in Subsection
1279
59-10-114
(1)(c);
1280
(d) a withdrawal described in Subsection
59-10-114
(1)(e);
1281
(e) the amount described in Subsection
59-10-114
(1)(f);
1282
(f) subject to Subsection
59-10-114
(6), the interest described in Subsection
1283
59-10-114
(1)(g);
1284
(g) a distribution described in Subsection
59-10-114
(1)(h);
1285
(h) a distribution described in Subsection
59-10-114
(1)(i); or
1286
(i) an expense described in Subsection
59-10-114
(1)(j).
1287
(2) In calculating state taxable income for purposes of this part, the following amounts
1288
shall be subtracted from the adjusted gross income of a resident or nonresident individual:
1289
(a) the interest or dividends described in Subsection
59-10-114
(2)(a);
1290
(b) subject to Subsection
59-10-114
(4), the amount described in Subsection
1291
59-10-114
(2)[(k)](j);
1292
(c) an amount described in Subsection
59-10-114
(2)[(n)](m);
1293
(d) the amount described in Subsection
59-10-114
(2)[(o)](n); and
1294
(e) an amount described in Subsection
59-10-114
(2)[(p)](o).
1295
Section 19. Retrospective operation.
1296
This bill has retrospective operation for taxable years beginning on or after January 1,
1297
2007.
Legislative Review Note
as of 2-6-07 5:29 PM