S.B. 28

1

TAX CREDITS - REMOVAL OF TAX CREDIT FROM
2 TAX FORM AND PROHIBITION ON CLAIMING
3 OR CARRYING FORWARD TAX CREDIT
4 2002 GENERAL SESSION
5 STATE OF UTAH
6 Sponsor: Curtis S. Bramble
7 This act amends the Individual Income Tax and Corporate Franchise and Income Taxes to
8 require the State Tax Commission under certain circumstances to remove a tax credit from
9 a tax return, to prohibit a person filing a tax return from claiming or carrying forward a tax
10 credit under certain circumstances, and to require the State Tax Commission to make
11 reports under certain circumstances to the Revenue and Taxation Interim Committee and
12 certain state agencies. This act has retrospective operation for taxable years beginning on
13 or after January 1, 2002.
14 This act affects sections of Utah Code Annotated 1953 as follows:
15 ENACTS:
16 59-7-615, Utah Code Annotated 1953
17 59-10-135, Utah Code Annotated 1953
18 Be it enacted by the Legislature of the state of Utah:
19 Section 1. Section 59-7-615 is enacted to read:
20 59-7-615. Removal of tax credit from tax form and prohibition on claiming or
21 carrying forward a tax credit -- Conditions for removal and prohibition on claiming or
22 carrying forward a tax credit -- Commission reporting requirements.
23 (1) As used in this section:
24 (a) "Tax credit" means a nonrefundable tax credit listed on a tax return.
25 (b) "Tax return" means:
26 (i) a corporate return as defined in Section 59-7-101 filed in accordance with this chapter;
27 or

28 (ii) a tax return filed in accordance with Chapter 8, Gross Receipts Tax on Certain
29 Corporations Not Required to Pay Corporate Franchise or Income Tax Act.
30 (2) Beginning two taxable years after the requirements of Subsection (3) are met:
31 (a) the commission shall remove a tax credit from each tax return on which the tax credit
32 appears; and
33 (b) a person filing a tax return may not claim or carry forward the tax credit.
34 (3) The commission shall remove a tax credit from a tax return and a person filing a tax
35 return may not claim or carry forward a tax credit as provided in Subsection (2) if:
36 (a) the total amount of the tax credit claimed or carried forward by all persons filing tax
37 returns is less than $10,000 per year for three consecutive taxable years beginning on or after
38 January 1, 2002; and
39 (b) less than ten persons per year for three consecutive taxable years beginning on or after
40 January 1, 2002, file a tax return claiming or carrying forward the tax credit.
41 (4) The commission shall, on or before the November interim meeting of the year after the
42 taxable year in which the requirements of Subsection (3) are met:
43 (a) report to the Revenue and Taxation Interim Committee that in accordance with this
44 section:
45 (i) the commission is required to remove a tax credit from each tax return on which the
46 tax credit appears; and
47 (ii) a person filing a tax return may not claim or carry forward the tax credit; and
48 (b) notify each state agency required by statute to assist in the administration of the tax
49 credit that in accordance with this section:
50 (i) the commission is required to remove a tax credit from each tax return on which the
51 tax credit appears; and
52 (ii) a person filing a tax return may not claim or carry forward the tax credit.
53 Section 2. Section 59-10-135 is enacted to read:
54 59-10-135. Removal of tax credit from tax form and prohibition on claiming or
55 carrying forward a tax credit -- Conditions for removal and prohibition on claiming or
56 carrying forward a tax credit -- Commission reporting requirements.
57 (1) As used in this section:
58 (a) "Tax credit" means a nonrefundable tax credit listed on a tax return.

59 (b) "Tax return" means an individual income tax return filed in accordance with this
60 chapter.
61 (2) Beginning two taxable years after the requirements of Subsection (3) are met:
62 (a) the commission shall remove a tax credit from each tax return on which the tax credit
63 appears; and
64 (b) a person filing a tax return may not claim or carry forward the tax credit.
65 (3) The commission shall remove a tax credit from a tax return and a person filing a tax
66 return may not claim or carry forward a tax credit as provided in Subsection (2) if:
67 (a) the total amount of the tax credit claimed or carried forward by all persons filing tax
68 returns is less than $10,000 per year for three consecutive taxable years beginning on or after
69 January 1, 2002; and
70 (b) less than ten persons per year for three consecutive taxable years beginning on or after
71 January 1, 2002, file a tax return claiming or carrying forward the tax credit.
72 (4) The commission shall, on or before the November interim meeting of the year after the
73 taxable year in which the requirements of Subsection (3) are met:
74 (a) report to the Revenue and Taxation Interim Committee that in accordance with this
75 section:
76 (i) the commission is required to remove a tax credit from each tax return on which the
77 tax credit appears; and
78 (ii) a person filing a tax return may not claim or carry forward the tax credit; and
79 (b) notify each state agency required by statute to assist in the administration of the tax
80 credit that in accordance with this section:
81 (i) the commission is required to remove a tax credit from each tax return on which the
82 tax credit appears; and
83 (ii) a person filing a tax return may not claim or carry forward the tax credit.
84 Section 3. Retrospective operation.
85 This act has retrospective operation for taxable years beginning on or after January 1, 2002.

Legislative Review Note
as of 11-20-01 2:13 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

Committee Note

The Revenue and Taxation Interim Committee recommended this bill.