S.B. 34 Enrolled

INDIVIDUAL INCOME TAX RELIEF FOR
LOW-INCOME INDIVIDUALS AND RELATED
STATE TAX COMMISSION AMENDMENTS
2001 GENERAL SESSION
STATE OF UTAH
Sponsor: Lyle W. Hillyard
Millie M. Peterson

This act modifies the Individual Income Tax Act by establishing an income level below which
a taxpayer is exempt from paying state individual income taxes. The act amends the
authority of the State Tax Commission to prescribe tax tables. This act defines terms,
repeals obsolete language, and makes technical changes. This act takes effect for taxable
years beginning on or after January 1, 2002.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
59-10-104, as last amended by Chapter 333, Laws of Utah 1996
59-10-105, as last amended by Chapter 213, Laws of Utah 1988
59-10-116, as renumbered and amended by Chapter 2, Laws of Utah 1987
ENACTS:
59-10-104.1, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 59-10-104 is amended to read:
59-10-104. Tax basis -- Rates -- Exemption.
[(1) For taxable years beginning on or after January 1, 1996, but beginning before January
1, 1997, a tax is imposed on the state taxable income, as defined in Section 59-10-112 , of every
resident individual as follows:]
[(a) For an individual, other than a husband and wife or head of household required to use
the tax table under Subsection (1)(b), the tax under this section is imposed in accordance with the
following table:]
[If the state taxable income is: The tax is:]

[Less than or equal to $750 2.55% of the state taxable income]
[Greater than $750 but less than or equal $19, plus 3.5% of state taxable income]
[to $1,500 greater than $750]
[Greater than $1,500 but less than or equal $45, plus 4.4% of state taxable income]
[to $2,250 greater than $1,500]
[Greater than $2,250 but less than or equal $78, plus 5.35% of state taxable income]
[to $3,000 greater than $2,250]
[Greater than $3,000 but less than or equal $119, plus 6% of state taxable income]
[to $3,750 greater than $3,000]
[Greater than $3,750 $164, plus 7% of state taxable income]
[greater than $3,750]
[(b) For a husband and wife filing a single return jointly, or a head of household as defined
in Section 2(b), Internal Revenue Code, filing a single return, the tax under this section is imposed
in accordance with the following table:]
[If the state taxable income is: The tax is:]
[Less than or equal to $1,500 2.55% of the state taxable income]
[Greater than $1,500 but less than or equal $38, plus 3.5% of state taxable income]
[to $3,000 greater than $1,500]
[Greater than $3,000 but less than or equal $91, plus 4.4% of state taxable income]
[to $4,500 greater than $3,000]
[Greater than $4,500 but less than or equal $157, plus 5.35% of state taxable income]
[to $6,000 greater than $4,500]
[Greater than $6,000 but less than or equal $237, plus 6% of state taxable income]
[to $7,500 greater than $6,000]
[Greater than $7,500 $327, plus 7% of state taxable income]
[greater than $7,500]
[(2) For] (1) Except as provided in Subsection (2), for taxable years beginning on or after
January 1, 1997, a tax is imposed on the state taxable income, as defined in Section 59-10-112 , of

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every resident individual as follows:
(a) For an individual, other than a husband and wife or head of household required to use
the tax table under Subsection [(2)] (1)(b), the tax under this section is imposed in accordance with
the following table:
If the state taxable income is: The tax is:
Less than or equal to $750 2.3% of the state taxable income
Greater than $750 but less than or equal $17, plus 3.3% of state taxable income
to $1,500 greater than $750
Greater than $1,500 but less than or equal $42, plus 4.2% of state taxable income
to $2,250 greater than $1,500
Greater than $2,250 but less than or equal $74, plus 5.2% of state taxable income
to $3,000 greater than $2,250
Greater than $3,000 but less than or equal $113, plus 6% of state taxable income
to $3,750 greater than $3,000
Greater than $3,750 $158, plus 7% of state taxable income
greater than $3,750
(b) For a husband and wife filing a single return jointly, or a head of household as defined
in Section 2(b), Internal Revenue Code, filing a single return, the tax under this section is imposed
in accordance with the following table:
If the state taxable income is: The tax is:
Less than or equal to $1,500 2.3% of the state taxable income
Greater than $1,500 but less than or equal $35, plus 3.3% of state taxable income
to $3,000 greater than $1,500
Greater than $3,000 but less than or equal $84, plus 4.2% of state taxable income
to $4,500 greater than $3,000
Greater than $4,500 but less than or equal $147, plus 5.2% of state taxable income
to $6,000 greater than $4,500
Greater than $6,000 but less than or equal $225, plus 6% of state taxable income

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to $7,500 greater than $6,000
Greater than $7,500 $315, plus 7% of state taxable income
greater than $7,500
(2) Subsection (1) does not apply to a resident individual exempt from taxation under
Section 59-10-104.1 .
Section 2. Section 59-10-104.1 is enacted to read:
59-10-104.1. Exemption from taxation.
(1) For purposes of this section:
(a) "personal exemptions" means the total exemption amount an individual is allowed to
claim for the taxable year under Section 151, Internal Revenue Code, for:
(i) the individual;
(ii) the individual's spouse; and
(iii) the individual's dependents; and
(b) "standard deduction":
(i) except as provided in Subsection (1)(b)(ii), means the standard deduction an individual
is allowed to claim for the taxable year under Section 63, Internal Revenue Code; and
(ii) notwithstanding Subsection (1)(b)(i), does not include an additional amount allowed
under Section 63(f), Internal Revenue Code, for an individual or an individual's spouse who is:
(A) blind; or
(B) 65 years of age or older.
(2) For taxable years beginning on or after January 1, 2002, an individual is exempt from
a tax imposed by Section 59-10-104 , 59-10-105 , or 59-10-116 if the individual's adjusted gross
income on the individual's federal individual income tax return for the taxable year is less than or
equal to the sum of the individual's:
(a) personal exemptions for that taxable year; and
(b) standard deduction for that taxable year.
Section 3. Section 59-10-105 is amended to read:
59-10-105. Optional tax -- Calculation -- Commission authority to prescribed tax tables

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-- Exemption.
[In lieu of the tax imposed under Section 59-10-104 there is hereby imposed]
(1) (a) Except as provided in Subsection (4), for [each] taxable [year] years beginning on or
after [December 31, 1972] January 1, 2002, if the commission prescribes state individual income tax
tables in accordance with Subsection (2), a tax is imposed as provided in this section on the state
taxable income of [every] an individual who elects to compute [his] the individual's income tax in
accordance with the state individual income tax tables prescribed [in Section 3 of the Internal
Revenue Code, a tax computed in accordance with the tax tables applicable to such taxable year as
prescribed by the commission. Such an electing taxpayer] by the commission.
(b) An individual who pays a tax imposed by this section is not subject to the tax imposed
by Section 59-10-104 .
(2) The commission may prescribe state individual income tax tables:
(a) for a taxable year;
(b) for purposes of computing the tax authorized by this section; and
(c) if the state individual income tax tables are substantially in accordance with Section 3,
Internal Revenue Code, except that the commission shall use:
(i) the tax rates and tax brackets provided for in Section 59-10-104 ;
(ii) state taxable income as defined in Section 59-10-112 ; and
(iii) any other provision of this chapter necessary to prescribe state individual income tax
tables under this section.
(3) An individual electing to compute the individual's income tax in accordance with this
section shall use the:
(a) standard deduction as provided in Section 63(c) [of the], Internal Revenue Code; and
[the]
(b) number and amount of exemptions allowed by Section 151 [of the], Internal Revenue
Code.
(4) This section does not apply to an individual exempt from taxation under Section
59-10-104.1 .

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Section 4. Section 59-10-116 is amended to read:
59-10-116. Tax on nonresident individual's state taxable income -- Calculation --
Exemption.
(1) For purposes of this section:
(a) "state income tax percentage" means a percentage equal to a nonresident individual's
federal adjusted gross income for the taxable year received from Utah sources, as determined under
Section 59-10-117 , divided by the nonresident individual's total federal adjusted gross income for
that taxable year; and
(b) "state taxable income" means the product of a nonresident individual's:
(i) federal taxable income, as defined in Section 59-10-111 , with the modifications,
subtractions, and adjustments provided for in Section 59-10-114 ; and
(ii) tax imposed under Section 59-10-104 .
[A] (2) (a) Except as provided in Subsection (3), a tax is [hereby] imposed as provided in
this section on the state taxable income[, as defined in Sections 59-10-111 and 59-10-112 , of every]
calculated under this section of a nonresident individual [in accordance with the schedules in Section
59-10-104 , but the individual's Utah tax shall be only the portion of the resident tax so calculated
as the individual's federal adjusted gross income received from Utah sources (determined under
Section 59-10-117 ) bears to the individual's total federal adjusted gross income for the same taxable
year].
(b) The tax under this section shall be calculated by multiplying the nonresident individual's
state taxable income by the nonresident individual's state income tax percentage.
(3) This section does not apply to a nonresident individual exempt from taxation under
Section 59-10-104.1 .
Section 5. Effective date.
This act takes effect for taxable years beginning on or after January 1, 2002.

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